Safeguard Properties

Beck Bill to Prevent Sandy Foreclosures Advances Amidst Call for Further Action

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Legislation Update
November 4, 2016

Senator Jennifer Beck’s (R-Monmouth) bill to create foreclosure protections for Superstorm Sandy victims has passed the Senate Budget Committee.

“Although four years have passed since Superstorm Sandy,” Senator Beck said. “We still have 3,200 homeowners eager to complete elevating and rebuilding projects, including some that have just begun. They don’t have the ability to fund a mortgage and a rent.”

Senator Beck’s bill, S-2300 would establish temporary protections against foreclosure for families who continue to experience economic distress as a result of Superstorm Sandy.

The legislation would also direct the Commissioner of Community Affairs to notify Sandy-impacted families of their eligibility for foreclosure protections and post eligibility information on the department’s website. The Commissioner must also notify courts and mortgage lenders of individuals who are eligible for such protections.

An identical version of this legislation has passed the Assembly. The bill now heads to the Senate floor for a final legislative approval.

While 4,400 homeowners in the RREM program have completed their projects, Senator Beck urged further action to help the remaining families return home. Beck’s “Superstorm Sandy Homeowners Protection Act” (S-532), would extend protections of the Consumer Fraud Act to homeowners enrolled in the RREM and LMI programs, providing recourse for victims of contractor fraud. S-532 is currently awaiting a hearing in the Budget Committee.

“S-2300 will provide essential protections to Sandy homeowners facing foreclosure and I am elated to see it advance today,” Senator Beck added. “At the same time, I respectfully urge the Budget Committee Chairman to post the Superstorm Sandy Homeowners Protection Act for a vote as soon as possible. This act is essential to protecting Sandy homeowners from being further victimized. They need and deserve our support now.”

Source: Senator Jennifer Beck (New Jersey Senate Republican Office)

Additional Resource:
New Jersey Legislature (S-2300 information)

Treasury: Here?s What Housing Reform Should Look Like

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Industry Update
October 27, 2016

 “Whether they are aware of it or not, some of the most momentous decisions American families make are shaped by how the housing finance system serves them,” said U.S. Department of the Treasury Counselor Antonio Weiss and Assistant Secretary for Economic Policy Karen Dynan in a recent commentary.

But how is Treasury currently helping to shape the housing finance system to better serve consumers and promote homeownership?

One way is through the allocation of $2 billion in the past year of additional funds for foreclosure prevention and neighborhood stabilization through the Hardest Hit Fund. Treasury has also awarded grants through the Capital Magnet Fund (CMF) to promote $900 million in affordable homeownership and rental opportunities as well as worked to create broader loss mitigation standards for borrowers who face hardship and are unable to make their monthly mortgage payment as our Home Affordable Modification Program (HAMP) sunsets at the end of 2016.

However, Weiss and Dynan argue that these targeted improvements and critical additional funds are not sufficient to address the shortfall. Instead, only comprehensive reform will allow a broader range of Americans, including minority communities and middle-class and working families, to further share in the recovery. “The great unfinished business of financial reform is refocusing the housing finance system toward better meeting the needs of American families. How policymakers address this challenge will be the critical test for any model for housing finance reform,” they said. “The most fundamental question any future system must answer is this: Are we providing more American households with greater and more sustainable access to affordable homes to rent or own? It is through this lens that we will assess the performance of the current marketplace and evaluate a set of policy considerations for addressing access and affordability in a future system.”

Treasury acknowledges that currently, there are no national loss mitigation standards for what loan modification options mortgage servicers should provide to borrowers when they are behind on monthly payments, but they believe appropriate modification options can determine whether a borrower gets to stay in his or her home. They also found that a range of housing industry stakeholders have acknowledged the need for broad loss mitigation standards for distressed homeowners similar to the standards established in HAMP.

“We are encouraged by industry efforts to harmonize policies on solutions for delinquent borrowers, including term extensions, rate reductions, principal reduction, and simplifying the documentation needed to complete a loan modification for a distressed borrower,” said Weiss and Dynan.

The department emphasized that they have been working with industry stakeholders to coalesce around national standards and will continue to encourage their development. Particularly, they believe these standards should:

  • Protect consumers with fair, transparent, and consistent terms, including those related to housing counseling, loan modifications, and alternatives to foreclosure
  • Provide investors with clear, consistent loss mitigation rules so they have certainty when evaluating securities, securitization and servicing agreements, and pools of loans
  • Balance the need to protect the solvency of the catastrophic insurance fund that supports securities issued by any regulated guarantor

“Comprehensive housing finance reform provides us an opportunity to reorient the housing system so it better serves all consumers and helps strengthen the broader economy. Addressing the shortcomings of the current system is the most pressing challenge for any model for reform,” said Weiss and Dynan. “Taxpayers’ extraordinary and continuing support for the housing system obliges us to seize this challenge and enact reforms that protect and enhance fair and affordable access to a home.”

Source: DS News

Tech and Scale Are Key to Tackling Tight Servicing Margins

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Industry Update
October 18, 2016

Editor’s Note: This article is part of the National Mortgage News’ MBA Annual Special. Click here to see more from the report.

To put it bluntly, it’s hard to make a buck in servicing. In 2015, costs per loan rose to $2,386 from $1,965 a year earlier, according to data from the Mortgage Bankers Association. With interest rates remaining low and reducing income, profit margins are being squeezed tight thanks to a combination of unfavorable changes to the fair value of mortgage servicing rights and higher costs due to regulation.

But by decreasing costs through technology, outsourcing and scale, they not only can give their margins a much-needed boost but also set themselves up to reap the rewards in the future.

“We will be moving to a purchase market inevitably,” said Scott Fecteau, a managing director at Accenture Credit Services. “The people who are making investments now are positioning themselves for the next wave of purchase originations.”

Technologies that can drive servicing cost-savings take two forms: customer self-service technology and robotic process automation. Both of these technologies work to drive improved efficiency and drive higher satisfaction for consumers and employees alike.

More importantly, these technologies allow companies to devote employee resources to value-added services rather than tasks like fielding calls or data entry, said Kelly Adkisson, managing director for Accenture’s credit consulting practice in North America. The same mentality applies to the choice servicers face in whether or not to outsource certain parts of their business offshore.

“In servicing, the largest expense base is typically coming from your personnel,” Adkisson said, noting that robotic process automation alone can enable a 30% cost reduction or more for some companies.

But as important as those investments is another, perhaps counterintuitive one: scale.

“You need scale,” said Lee Smith, chief operating officer of Flagstar Bank, particularly with regards to companies in the performing servicing space. He estimates that a servicer needs between 180,000 and 200,000 loans to break even in the current working environment.

Flagstar has roughly 360,000 loans that it either services or subservices, which is why the company’s servicing division has remained profitable, Smith said.

“Once you get over 200,000, it’s all done at the margin and it’s all profit because you’ve already covered your fixed cost base,” Smith said.

Source: National Mortgage News

State Spotlight: Acceleration Notices Require Strict Mortgage Compliance

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Legislation Update
October 14, 2016

Lauren Riddick is an attorney with Codilis & Associates, P.C., specializing in contested foreclosure matters and condominium association disputes. Prior to joining the firm, she was an Adjunct Professor of Law with several colleges and a Securities Attorney for a large broker-dealer. Riddick is licensed in Illinois and Florida.

Until now, demand letters, notices of acceleration and acceleration notices have largely been taken as synonymous in the mortgage servicing industry—a notice required by most mortgages informing a defaulting borrower that a foreclosure filing is on the horizon.  However, a recent case sends a powerful message to servicers; when it comes to these notices, it is critical to follow the exact language of the mortgage itself, or risk the unwinding of an entire legal action.  In Cathay Bank v. Accetturo[i], the ruling court held that Cathay Bank’s failure to “strictly comply” with the mortgage “divested the lender of its right to file” its foreclosure action. [ii] In essence, the court’s 2016 ruling wiped out a three-year foreclosure action stemming all the way back to a 2011 default.

Cathay Bank’s mortgage required the lender to give notice “prior to acceleration.” [iii] The mortgage also required that the notice:  1) state the default, 2) provide at least 30 days to cure the default, 3) inform the borrower that the “failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured…”, 4) and inform the borrower of their right to reinstate and assert defenses to a foreclosure proceeding.[iv] Although mortgage instruments vary, this language is fairly common in the industry.

And in fact, Cathay Bank did send several notices to the borrower.  The first three identified the loan as being “seriously delinquent.”[v] The court quickly dismissed these since they “failed to incorporate the specific information” required by the mortgage. The fourth notice was entitled “Notice of Intent to Foreclose” and stated that unless Cathay Bank received the amount owed by a certain date, that the bank “may exercise its rights and remedies as provided for in the Guaranty and other related loan documents.”[vi]  However, the notice provided only 21 days to cure the default. This notice, in the eyes of the court, “failed to mention acceleration”, failed to provide the full 30 days to cure, and failed to list the specific wording required by the mortgage.[vii]  So, generally referencing wording that could be found in the loan documents was not deemed to be sufficient. The fifth and final notice was entitled “Notice of Default and Acceleration” and informed the borrower that the loan had now been accelerated.  The court dismissed this as well, since the letter stated that the note had already been accelerated, and therefore could not be a notice “prior to acceleration” as dictated by the mortgage.[viii]

Moreover, the court held that the failure to strictly comply with the mortgage was more than just a technical defect, alluding to case law which permitted foreclosure actions despite the fact that perfect notices weren’t present.

Defense counsels will surely take note of this case and will likely make much of the court’s strict compliance ruling.  Therefore, to avoid possibly similar complications, acceleration notices should track their related mortgages as closely as possible, and should ideally include verbatim phrases required by the mortgage. Additionally, and perhaps most importantly in terms of servicing practice, servicers must now recognize the difference between a notice that advises of a possible upcoming acceleration versus a notice that advises that an acceleration has already occurred.

[i] 2016 Il App (1st) 152783

[ii] Id. ¶50.

[iii] Id. ¶5.

[iv] Id.

[v] Id. ¶6.

[vi] Id.

[vii] Id. ¶40.

[viii] Id. ¶41.

Source: DS News

Ninth Circuit Holds That Enforcing a Security Interest is Not Necessarily Debt Collection

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Legislation Update
October 27, 2016

On Oct. 19, 2016, the Ninth Circuit held that merely enforcing a security interest is not “debt collection” under the federal Fair Debt Collection Practices Act (“FDCPA”).  In so holding, the Ninth Circuit disagreed with earlier decisions by the Fourth and Sixth Circuits, creating a split that might eventually be resolved by the U.S. Supreme Court.

In Ho v. ReconTrust Co., NA., a borrower sued ReconTrust and Countrywide, claiming they violated federal law in pursuing foreclosure after she defaulted on her loan.  In particular, the borrower alleged that ReconTrust violated the FDCPA by sending her default notices stating the amounts owed.  The district court dismissed that claim, finding the trustee was not a debt collector engaged in debt collection under the FDCPA.

On appeal, the Ninth Circuit affirmed the dismissal.  In an opinion by Judge Kozinski, the Court observed that a notice of default and a notice of sale may state the amounts due, but they do not demand payment.  And in California, deficiency judgments are not permitted after a non-judicial foreclosure sale, so no money can be collected from the homeowner.

While default notices may “induce” a borrower to pay off a debt, the Ninth Circuit noted that such inducements arose from the existence of the lien.  As Kozinski put it: “The fear of having your car impounded may induce you to pay off a stack of accumulated parking tickets, but that doesn’t make the guy with the tow truck a debt collector.”

Accordingly, enforcing a security interest does not fall within the general definition of “debt collection” under the FDCPA, which means lenders and trustees are not subject to the statute’s general prohibitions on debt collectors.  Rather, enforcing a security interest falls within the narrow purview of 15 U.S.C. § 1692f(6), which only prohibits the taking, or threatening to take, non-judicial action to dispossess a consumer of his or her property when there is no right or intent to do so.

The Court’s ruling is important as the notices complained of in Ho are required by California law prior to exercising the right of non-judicial foreclosure.  A lender’s right to enforce a security agreement would be frustrated if the FDCPA were read to bar lenders from complying with California notice requirements.  Such a ruling could have effectively ground foreclosures in the state to a halt.

Source: The National Law Review

Industry Hits A ?Momentous Milestone? for Loan Modifications

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Industry Update
October 20, 2016

HOPE NOW, the voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors, recently released its August 2016 loan modification data which shows that close to 119,000 homeowners avoided foreclosure and received a mortgage solution.

“As the August HOPE NOW data report indicates, the housing market continues to normalize and move towards pre-crisis levels,” says Eric Selk, Executive Director for HOPE NOW. “We are extremely pleased to see the industry remain committed to preserving homeownership and helping homeowners avoid foreclosure. The mortgage industry hit a momentous milestone in August. Eight million permanent modifications have been reached since 2007. This is a huge accomplishment by the industry and illustrates the continued work that mortgage servicers are doing to assist those in need.”

Total non-foreclosure solutions (the combination of total loan modifications, short sales, deeds in lieu and workout plans) increased 6 percent from July 2016. With approximately 36,000 completed in August, an increase of approximately 11 percent was also seen year-over-year. This total includes modifications completed under both proprietary programs and the government’s Home Affordable Modification Program (HAMP).

Of the permanent loan modifications completed, HOPE NOW reports that an estimated 25,000 were through proprietary programs and 10,610 were completed via HAMP.

“As permanent modifications remain steady, homeowners are also receiving more ‘upstream’ solutions,” says Selk. “Solutions such as repayment plans and other retentions options being offered to those with short-term delinquency issues. Our members are not only focused on offering viable solutions for at-risk borrowers, but fulfilling quicker results at the time of delinquency.”

Total permanent modifications completed reached 8 million, and of that number, approximately 6.4 million have been proprietary modifications. The remaining 1,644,427 have been completed via HAMP.

“Serious delinquency still affects more than 1.5 million borrowers – something that everyone should be paying attention to – although this number is close to pre-crisis figures,” says Selk. “As part of an effort to engage more effectively with communities, HOPE NOW continues to host housing roundtables and face-to-face outreach events. Just recently, HOPE NOW hosted its second community roundtable of 2016 in Tampa, Florida (first one in Orange County, California). In partnership with Congresswoman Kathy Castor, HOPE NOW held a roundtable with 50 local housing partners in the Tampa area. Topics of discussion included access to mortgage credit, state of housing, and local assistance programs.”

To view the full report from HOPE NOW, click HERE.

Source: DS News

How Long it Takes to Complete a Foreclosure in N.J. by County

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Industry Update
October 25, 2016

New Jersey continues to buck the national trends when it comes to the dubious housing market.

Recent data shows the average time for a homeowner to go through foreclosure has increased by 7 percent since last year, adding three months to the 2015 average.

Properties in foreclosure across the United States have dropped to pre-recession numbers, and the market continues to show signs of improvement with September marking an 11-year low for foreclosure starts, according to a report from ATTOM Data Solutions, the new parent company of California-based housing firm RealtyTrac.

Foreclosure rate by county in N.J.

The Garden State, however, still has one the highest foreclosure rates, second only to Delaware, with one in every 691 housing units having a foreclosure filing.

In addition, it takes nearly three and a half years, or 1,262 days, to complete the foreclosure process in New Jersey, which is the longest foreclosure timeline in the country.

Virginia continues to post the shortest foreclosure period, at 196 days, in a state where properties are not required to go through a judicial foreclosure process. New Jersey foreclosures are required to go into the state’s court system, a process that takes on average about a year.

In Bergen County, the foreclosure process was the longest in the state, averaging 1,452 days, according to third quarter numbers. Hudson and Ocean followed with an average period of 1,408 and 1,396 days, respectively, to complete a filing.

ATTOM tracks foreclosure homes once a notice of default has been issued until it’s sold at auction or as a bank-owned property, based on data collected from 2,200 counties nationwide.

New Jersey only tracks foreclosure properties in the court system. It does not count properties in default, the pre-foreclosure process, or once the property is turned over to a bank as a real estate owned property, which the state deems a post-foreclosure property.

Source: nj.com (full article)

Fighting Fire in Louisville, the Hackathon Way

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Industry Update
October 26, 2016

When the city identified a problem with fires in vacant properties, it asked the local tech community for help.

An empty building is a fire hazard. The city of Louisville has turned to tech to do something about that.

This month, Kentucky’s largest city will begin a pilot program to see if a handful of devices can help cut back on the risk of blazes that start where no one’s looking.

Those devices aren’t off-the-shelf, though. They came about through a novel interaction between the city and its tech-savvy citizens. It’s part of a broader innovation initiative launched in 2011 by the mayor’s office.

“It’s not easy to tap into some of those skills that a Google or somebody else can just pull from,” said Edward Blayney, innovation project manager at Louisville’s Office of Performance Improvement and Innovation.

Louisville wasn’t about to let that stand in its way. In November 2015, it held a hackathon.

In doing so, the city was drawing on the spirit of the maker movement. Makers are the do-it-yourself crowd, people who come together to tinker and create on a smaller scale and outside the traditional confines of manufacturing. It was also borrowing from a tradition among tech companies — like Google, but also Facebook, Meetup and even Tinder — that look for grassroots-style innovation from across their staffs.

Louisville held its week-long hackathon at a local makerspace called LVL 1 to see if anyone could come up with a workable idea. About 27 people showed up and produced a handful of projects.

The judging panel comprised members of the fire department, the emergency dispatch team and the fire protection industry, and it settled on a project that’s now called Casper, for “completely autonomous solar-powered event responder.”

Casper’s 3D printed case contains a circuit board, battery, antenna and a microphone circuit. Essentially, Casper is a device that can listen, even from several rooms away, for the specific frequency a smoke alarm emits when it goes off and then can alert emergency responders. The alert will then go to a setup that looks something like Google Maps on a screen located in the city’s emergency response center.

Each of the nine city-owned properties in the pilot program will get one smoke alarm and one Casper device.

If Casper’s successful, that should help turn around some disturbing stats Louisville discovered about vacant properties and fire. Looking at data from an earlier project, the city determined that at least 44 percent of fires in district one, Louisville’s economically challenged west end, that involved two or more buildings also involved a vacant property. That means a fire can start and then spread before anyone realizes what’s happening and calls 911. This was not just a matter of vacant properties burning down. If the fires spread, other properties — and people, too — could be in danger.

Increasingly, cities are turning to tech-savvy citizens to solve problems, often using events like hackathons. Hackathons are typically gatherings centered on solving a specific problem within a window of time, like a weekend. Projects are judged, and depending on the circumstances, prizes may be awarded.

In May, San Diego held a hackathon to connect local tech talent with its Climate Action Plan. Houston holds an annual hackathon in partnership with a civic technology advocacy group called Sketch City.

At the same time, cities are also using data to identify and fix problems. Boston, for example, has a principal data scientist named Curt Savoie. In one instance a few years ago, Savoie looked at data and found that if a streetlight goes out, it takes about 10 days before property crime in the area goes up, which is roughly the time frame the city has to fix the light.

More broadly, the White House has even been pushing for greater collaboration between government agencies, all the way down to the local level, and those in the tech community. It was the big message of President Barack Obama’s South by Southwest keynote this year.

For the guys on the winning hackathon team in Louisville, learning that there was a real problem with fires in vacant properties was enough motivation to donate their time and skills.

“I’m concerned for the safety of these people and I didn’t know it was an issue until the hackathon happened,” said Nate Armentrout, one of the team members.

Team members had their work cut out for them. One of the initial challenges to solve was that these vacant properties have no power. The devices also had to be relatively inexpensive to make and not create a burden for the city — so changing batteries every so often wasn’t an option. That’s why Casper is solar-powered. The team has created hardware and software for Casper itself.

Armentrout, an entrepreneur and engineer, estimated that he and teammates David Jokinen, who works at a computer security company, and James Gissendaner, a graduate student, have put in a minimum of 10 hours a week on the project since winning the hackathon.

If the pilot program is successful, Louisville will look at the feasibility of expanding the project.

Success could also mean future similar collaborations in the community.

“What this hackathon has really showed is that if we can help [citizens] understand the problem, they can help us bring a solution that’s pretty viable,” Blayney said.

Source: CNET

Boomerang Buyers Dust Themselves Off to Re-enter Market

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Industry Update
October 27, 2016

During the financial crisis and housing burst, an unprecedented number of homeowners relinquished their homes to foreclosure or other non-foreclosure actions and thus felt the repercussions of having the mark of foreclosure, short sale, or bankruptcy on their credit report for the next seven years. Now coming into the eighth year since the peak of the crisis, 2.5 million consumers are set to potentially re-entering the market with a clean credit file and fresh perspective between June 2016 and June 2017.

In examining the consumers who foreclosed or short-sold between 2007 and 2010 and have since opened a new mortgage, it was found that these “boomerang borrowers” are showing responsible credit behaviors, have improving credit scores and are current on their debts.

“With millions of borrowers potentially coming back into the housing market, the trends that we’re seeing are promising for both the mortgage seeker and the lender,” said Michele Raneri, VP of Analytics and New Business Development at Experian. “In the coming years, boomerang borrowers will be a critical segment of the real-estate market. While many of these borrowers have gone through a very difficult time, it is encouraging to see them taking control of their finances with better credit scores and all-around better credit management.”

According to a recent report from Experian, 68 percent of these consumers are scoring in the near-prime or higher credit segments. This means that the opportunity for these consumers to qualify for mortgage loans is growing stronger. Additionally, the research shows that the people in the short-sale category are rebounding at a higher rate than those who foreclosed, and are making their payments on time.

Experian reported that nearly 29 percent of those who short-sold between 2007 and 2010 have opened a new mortgage, but only 1.5 percent of this short-sale group is delinquent on their mortgage; a number that has fallen below the national average of 2.8 percent.

Likewise, more than 12 percent of those who foreclosed have subsequently opened new mortgages and are showing positive signs when it comes to credit management with just 3 percent delinquent on their current mortgage.

The VantageScore (developed by Experian, Equifax, and Trans Union) credit scores of the boomerang buyers have climbed significantly since their foreclosures and short sales, even surpassing the scores they had prior to the negative event. The consumers who previously had a foreclosure and have subsequently opened a mortgage have an average credit score of 680, a 20.8 percent increase compared with the scores at the time of foreclosure.

In comparison, the consumers who previously had a short sale and have subsequently opened a mortgage have an average credit score of 706, an increase of 16.5 percent from the scores at the time of short sale.

This increase in boomerang buyers’ credit scores could bode well for the ability of these consumers to obtain a mortgage loan again.

A report from CoreLogic’s Kristine Yao found that boomerang buyers are, on average, four times more likely to finance with FHA loans than traditional non-distressed, owner-occupied repeat buyers. FHA loans are, as a general rule, easier to obtain than conventional loans for cash-strapped borrowers with past foreclosures in their credit history because FHA guidelines allow potential borrowers to apply for a loan three years after the foreclosure sale date with a minimum 3.5 percent down and a credit score of at least 580.

With more ease of access to boomerang buyers, it is no surprise that states hit hardest by the foreclosure crisis were reported to have the highest shares of boomerang buyers return based on 2007 through 2013 total foreclosures.

Specifically, Los Angeles, California; Phoenix, Arizona; and Sacramento, California have the largest number of these buyers, congruent with the states CoreLogic identified as having the highest share of boomerang buyers. CoreLogic showed that three highest boomerang buyer states, which were Arizona, Nevada, and Michigan, each saw 32 percent of foreclosed homeowners purchase again, 10 percentage points higher than the national boomerang buyer share. Likewise, California and Florida, states with the highest total foreclosures, had boomerang buyer shares of 24.8 percent and 20.3 percent, respectively.

Source: DS News

Back from the Brink: Treasury Celebrates Housing Recovery

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Industry Update
October 3, 2016

In 2008, the Emergency Economic Stabilization Act was enacted, implementing the Troubled Asset Relief Program (TARP). In a new report from the U.S. Department of the Treasury’s spokesperson, Rob Runyan, it is reported that this eighth anniversary serves as a reminder that this program was not only central to avoiding a financial collapse and getting the economy growing again.

To date, a total of $433.7 billion has been disbursed under TARP and as of August 31, cumulative collections under TARP, together with Treasury’s additional proceeds from the sale of non-TARP shares of AIG, total $442.1 billion. This exceeds disbursements by $8.4 billion.

This program was once feared to potentially lose taxpayers hundreds of billions of dollars but Treasury reports that instead it has generated a positive return.

“That’s a testament to TARP’s implementation but also to the other support provided to get the economy growing—including the Recovery Act and a dozen additional fiscal measures passed from 2009 to 2012,” says Runyan.

In addition to American taxpayers receiving their money back with TARP, they also gained Making Home Affordable (MHA), The Home Affordable Modification Program (HAMP), and The Hardest Hit Fund (HHF) program.

Through Making Home Affordable (MHA), approximately 2.7 million assistance actions helped homeowners avoid foreclosure. This has also benefited millions of their neighbors and communities by stabilizing home prices that typically fall with foreclosures.

The Home Affordable Modification Program (HAMP) which was the first and largest MHA program, assisted in creating the standard for mortgage modifications focused on payment reduction that has been adopted by the industry and will help homeowners avoid foreclosure long after HAMP retires, according to Runyan.

Finally, the Hardest Hit Fund (HHF) program has provided $7.6 billion in TARP funds in targeted assistance to 18 states and the District of Columbia that were determined to be the hardest hit by the Great Recession and housing crisis. Congress gave Treasury the authority to allocate an additional $2 billion late last year to the program to do the success seen in stabilizing neighborhoods in these hard hit communities. The program will now continue to the end of 2020. Runyan says that while the housing market has strengthened across the country, HHF continues to provide much-needed funding that will further aid these hardest-hit communities in recovery.

While no more taxpayer money is being invested in banks under TARP, Runyan notes that taxpayers are still receiving a return from the investments they made to stabilize the American banking system. TARP’s bank programs have recovered $275 billion through repayments and other income. This is $30 billion more than what was originally invested and Treasury continues to exit their investments and replace temporary government support with private capital. Specifically, under the Capital Purchase Program, Treasury invested in 707 financial institutions, 695 of which have exited the program.

Source: DS News