In February 2010, President Obama announced the “Hardest Hit Fund,” intended to provide assistance for homeowners in the states most affected by the downturn of the housing market and the recession. Under the program, $1.5 billion was initially allocated for innovative measures to help keep people in their homes, thereby preventing foreclosure and increasing the stability of the housing market.
At the outset, the federal government chose states for participation in this program based on two considerations. The five states selected had either higher than average unemployment rates or had experienced more than a 20 percent decline in home prices. Recognizing that the economic crisis has affected people across the country differently, each state’s Housing Finance Agency was granted the authority to distribute funds as necessary to effectively serve people in the state.
However, it quickly became apparent that this was not enough to address a problem the magnitude of the housing crisis.
In March, the program expanded to include five more states. These states were chosen because they had high concentrations of people living in areas of concentrated economic distress. The program aims to prevent what could become a tidal wave of foreclosures in these distressed communities. In August, Obama announced another $2 billion for the Hardest Hit Fund, adding five new states to the ranks of those receiving assistance.
For many, mortgages have simply become unmanageable. Between falling home values and rising unemployment rates, many individuals and families have simply become unable to meet their monthly mortgage payments, or it has become unreasonable to continue trying.
The federal government will undoubtedly keep trying to stabilize the housing market, as a strong housing market helps ensure a strong economy. However, for individual homeowners, it is important to consider personal situations. The fact that housing assistance is available does not mean that everyone should take it — for some, surrendering a home is an essential step in the financial recovery process.
If you are considering accepting housing assistance, or have questions related to bankruptcy and foreclosure, speak to a knowledgeable bankruptcy lawyer.