August 04, 2010
Rhode Island Housing
Providence, RI (Aug. 4, 2010) – Today, the U.S. Treasury announced its approval of plans for the distribution this fall of $43 million in federal Hardest-Hit Funding (HHF) in Rhode Island. On March 29, the Obama Administration announced that Rhode Island was one of five states to receive funding because high percentages of the population are struggling with unemployment, defined as counties in which the unemployment rate exceeded 12 percent in 2009. Rhode Island was supported in its efforts with tireless advocacy from the Rhode Island congressional delegation, led by U.S. Senator Jack Reed. The approved program, called HHFRI, will be offered throughout the state this fall, in partnership with certified counselors and lenders. HHFRI funds will be focused on preventing avoidable foreclosures by targeting Rhode Island homeowners in the state´s hardest hit communities who are not able to make their mortgage payments due to a hardship such as job loss or underemployment. The funds are intended to complement existing federal and lender programs, and will only be available to owner-occupied homeowners who have exhausted all other options.
Treasury has been working with Rhode Island Housing for two months to refine a proposed plan which was submitted in late May. The initial plan was created by a working group, led by Rhode Island Housing, and including other state agencies, lenders, counseling agencies, municipalities, community groups and Realtors. The group was brought together to identify the most effective ways to put the funds to work for Rhode Island homeowners. Since then the Treasury has been working with Rhode Island Housing to refine the plan to conform with federal laws and regulations and ensure an effective approach to help as many Rhode Island homeowners as possible.
“While Rhode Island Housing has gained much experience and success working through our HelpCenter and helping customers undergoing mediation under various city ordinances, the mortgage modification process across the country has proven to be slow and complicated,” said Richard Godfrey, Executive Director of Rhode Island Housing. “When our program is available to borrowers in mid-October, mortgage modifications will remain a challenging process. But we will be diligent about finding ways to help those who are facing foreclosure. If families can ultimately afford to keep their homes, then this is another valuable tool to help them. It is imperative that those in trouble do not wait for the federal funds to arrive. If you are struggling to pay your mortgage you should contact your lender or a HUD-approved counseling agency right away.
“Successful modifications will require time and commitment on the part of the customer as well as the lender and counseling agency. Patience and realistic evaluations of long-term personal financial situations are essential,” added Godfrey.
With today´s approval of the plan from Treasury, Rhode Island Housing will start setting up systems and procedures while training HUD-approved counselors and lenders to be ready to take applications for the program in the fall. Throughout this operations development and pilot phase, Rhode Island Housing will work closely with Treasury to refine the programs and ensure that HHFRI will effectively serve as many Rhode Island homeowners as possible. The pilot will allow for testing with a small sample of distressed homeowners who already have engaged in negotiations with their lenders through the assistance of our HelpCenter, Conciliation Coordinator, or Mortgage Servicing operation. At the end of the testing period, Rhode Island Housing must provide a detailed readiness assessment for review by Treasury before it can actually open the program to the general public. Until the Treasury approves the program roll-out, HUD-approved counseling agencies and lenders will not be taking any applications for this program, nor will there be waiting lists for HHF funding. Anyone in need of mortgage help should contact their lenders now to start discussions regarding their loan and the many options that can be considered in advance of this program.
HHFRI will be rolled-out in stages, to concentrate on the hardest hit communities in Rhode Island, starting with Providence, which statistically has been hardest hit by the foreclosure and unemployment crises. In fact, more than 24 percent of all foreclosures in Rhode Island in 2009 were in Providence, as well as 24 percent of unemployment claims. The program will next open up to 11 more of the state´s hardest-hit communities which have the next highest foreclosure percentages: Warwick (13.2 percent), Cranston (8 percent), Pawtucket (8 percent) Woonsocket (5.1 percent), West Warwick (4.3 percent), North Providence (4 percent), Johnston (4 percent), Coventry (3.6 percent), East Providence (3.1 percent), Cumberland (2.3 percent) and Central Falls (2 percent). Within two months of the launch of HHFRI, funds will be available statewide. The program is expected to last for 24 months and to help approximately 5000 families.
“This program directs targeted, federal funds to help prevent foreclosures and protect property values across the state. Eligible homeowners may qualify for emergency mortgage relief initiatives that address the specific needs of Rhode Island,” said Reed, a senior member of the Banking Committee who led the effort to expand the Hardest Hit Fund to Rhode Island. “I am pleased to have worked with the Obama Administration to ensure Rhode Island would be one of the few states to receive additional federal resources to address the foreclosure crisis. This targeted funding will be a big help to families and communities that have been hit hardest by the foreclosure crisis."
"Rhode Island has suffered more severely and for longer than most other states due to this recession, and our families are in need of help," said Senator Whitehouse. "We have been working tirelessly to ensure that Rhode Island families get the support they need to keep a roof over their heads. This funding will go a long way toward keeping more families in their homes while we work to recover from this severe economic recession."
“We are grateful to the Treasury and to our Congressional delegation for recognizing the severity of the economic and housing crises in Rhode Island and pushing to make these funds available to homeowners in crisis,” said Godfrey.
Homeowners who are struggling to pay their mortgages should act immediately by contacting their lender or a HUD-approved counseling agency. A complete list of HUD-approved counselors is available at www.hud.gov. Homeowners may also log onto www.HardestHitRI.org for updates on HHFRI or call the HHFRI information line at 401 277-1580. For information about options available to homeowners in distress, log onto www.makinghomeaffordable.gov. The website gives detailed instructions on how to contact your lender or counselor.
Rhode Island Housing is a self-sustaining public agency, which generates its own operating income, without state funding. Everything the agency earns is reinvested to meet the needs of the state. Together with its partners, the agency works to ensure that all people who live and work in Rhode Island can afford a safe, healthy home that meets their needs. Rhode Island Housing provides low-interest loans, grants, education, advocacy and consumer counseling to help its customers rent, buy and retain their homes. It also offers special programs to ensure that these homes are safe and healthy.
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