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Arizona's Plan to Stop Foreclosure
Ten states, including Arizona, are part of a program initiated by the Obama administration intended to help homeowners in those states avoid foreclosure.
June 04, 2010 /Money PR News/ -- Ten states, including Arizona, are part of a program initiated by the Obama administration intended to help homeowners in those states avoid foreclosure. This program contributes $2.1 billion to a "hardest hit fund" that will be divided among the states.
Arizona's Hardest Hit Fund
Arizona will be able to help approximately 4,000 homeowners with its share of the program funds. The allotment of $125 million will be used to assist homeowners facing foreclosure; Arizona has already submitted its proposal for use of the funds. According to the proposal, Arizona will pay up to $50,000 for selected homeowners' mortgages, provided the company that holds the loan will match that amount. After 10 years, if the homeowner has stayed in their home, the loan will be forgiven.
Arizona also intends to assist underemployed homeowners by covering up to 30 percent of their mortgage payments for a span of up to 24 months.
The goal with the hardest hit fund in Arizona is to help show lenders that it is better for everyone involved if they write down mortgages rather than initiating foreclosure proceedings. The write downs will help homeowners get back on their feet and back on track with their mortgage payments.
To qualify for the hardest hit fund in Arizona, homeowners will have to meet certain requirements. Participants' income must not exceed 120 percent of the median income in the area, and their financial hardships must be caused by extenuating circumstances rather than poor money management. For example, someone who has lost their job and can no longer afford mortgage payments might qualify, but someone who racked up $200,000 in debt on luxuries would not.
Divorce and Financial Hardship
Financial stress is one of the leading causes of divorce in the United States and it is possible that the hardest hit fund might even have an impact on the divorce rates. For example, couples contemplating divorce will no longer have to worry about dividing the mortgage payments or deciding who will remain in the home when the other moves out. And if financial stress is alleviated, reconciliation may, in some cases, be possible.
In the event of the divorce, if one party can remain in the home and make payments on an affordable schedule with assistance from the hardest hit fund, the stress of the divorce itself may be lessened. Children might be able to remain in the house they have grown up in, leading to an easier transition for everyone.
Reducing mortgage debt is a benefit for everyone hit by the struggling economy. Although the hardest hit fund will only be able to assist a small fraction of struggling homeowners, it might be just the boost some homeowners need to get back on their feet.
Article provided by Singer Pistiner P.C.
Visit us at www.singerpistiner.com
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