The Obama administration said it is increasing the number of states that will receive funds aimed at stemming the tide of foreclosures. The news came on the heels of changes made last week to the government's mortgage loan modification program.
The second HFA Hardest Hit Fund is targeting five states that have a high percentage of homeowners in economically distressed areas where unemployment was higher than 12% in 2009. The states that will receive $600 million of funding to help families stay in their homes are North Carolina, Ohio, Oregon, Rhode Island, and South Carolina.
The first HFA Hardest Hit Fund allowed up to $1.5 billion to be used in five states that had home price declines of more than 20%.
The aid allows the states to tailor foreclosure relief programs to local conditions. Depending upon the needs, funding could be used for unemployment programs, modifying mortgage loans, forbearance options, short sales, deed-in-lieu of foreclosures, reducing second liens, or writing down mortgage principal. Other programs could also qualify for funds.