Seems the Arizona Housing Department’s hardest-hit-fund program still isn’t doing much to help homeowners fend off foreclosure.
Through the first quarter of 2011, a period when Arizona ranked second in the nation for the number of foreclosures, only 10 homeowners received assistance under the Save Our Home AZ program.
The program is supposed to be the Arizona Department of Housing’s method to distribute its $125 million federal allocation from the Hardest Hit Fund aimed at helping homeowners in the 10 states hardest hit by foreclosures.
The stated intention is to” provide assistance of up to $50,000 to qualified homeowners to create an affordable and sustainable mortgage payment through a permanent principal reduction modification.” The program is supposed to be helping 4,000 homeowners.
So, how’s it doing so far? How many of the 4,000 have gotten assistance? Just the 10. One, zero. Ten. Yes, since the program’s inception in September 2010, only 10 homeowners have been helped.
Only one of those successful transactions has been a principal reduction, which economists, consumer advocates and some financial industry executives say will be necessary to end the foreclosure free-fall and stabilize the housing market. (Principal reduction might even end up part of a settlement being negotiated between the big five U.S. mortgage loan servicers and a coalition of state attorneys general.)
In addition to the glaring limitations of the program, which I wrote about back in December 2010, it seems the program only works if banks opt in. The money is there, but banks have to agree to participate. So far, in Arizona, it seems only Bank of America has done so. My servicer, Wells Fargo, apparently opted out.
If Arizona really works hard, maybe Save Our Home AZ can be even more dismal a failure than the federal HAMP loan modification program.
As of the end of June 2011, nine months after its inception, Save Our Home Arizona has only helped 78 Arizonans avoid foreclosure. Only three of those transactions were principal reductions.
At this rate, it will take 38.5 years for the program to meet its stated goal of helping 4,000 homeowners avoid foreclosure in this state that is one of the worst victims of the mortgage meltdown. Absurd!
Update 3/2012: As further proof this program is pie in the sky, as of Feb. 24 only a total of 16 modifications have been granted. In a year and a half. In a state consistently ranked in the top three hardest hit by foreclosures. Absurd.
Update 4/2012: Looks like Arizona isn’t the only state doing a dismal job disbursing the “Hardest Hit Fund” dollars to homeowners. A total of 3% of the fund has helped people save their homes from the banksters’ foreclosure feeding frenzy. Another farce, brought to you by your government.
Treasury Faulted in Effort to Relieve Homeowners