FindLaw KnowledgeBasePublished: 2012-02-16
In 2010, the U.S. Department of the Treasury established a Hardest Hit Fund to help stem the foreclosure tide in the 18 states with the worst unemployment rates and drop in home values. Ohio received more than $570 million from that fund to start a program called Restoring Stability: A Save the Dream Ohio Initiative to help struggling homeowners prevent foreclosure.
In January 2012, the Ohio Housing Finance Agency announced changes to the rules governing the program aimed at increasing the number of homeowners the program helps.
Restoring Stability Program
Under the Restoring Stability program, Ohio homeowners facing foreclosure can apply for one of five types of assistance, based on their needs:
- Rescue payment assistance: helps homeowners by providing payment to mortgage lenders to bring homeowners current in their mortgages
- Mortgage payment assistance: furnishes mortgage payments for unemployed or underemployed homeowners for up to 15 months
- Mortgage modification with contribution assistance: provides money to mortgage lenders to reduce homeowners’ mortgage principals in conjunction with a loan modification
- Transitional assistance: offers transition assistance for homeowners who opt for a short sale or deed-in-lieu of foreclosure
- Lien removal assistance: grants money to extinguish liens on homes
Qualification Rules Relaxed
The OHFA changed the qualification rules for the Restoring Stability program in an effort to help more people keep their homes. Under the new qualification guidelines, homeowners may have up to six months of mortgage payments in liquid assets, rather than three months, and still be eligible for assistance. Also, homeowners seeking rescue payment assistance to become current in their mortgage payments may now receive up to $25,000, up from $15,000.
Drawbacks to Loan Modifications
Not all Ohio homeowners have had success with the Restoring Stability program. Many homeowners were frustrated because of unclear program guidelines; others were distressed to find that, because they were current in their mortgage payments, they were not eligible for loan modifications.
Several applicants complained that the program was not set up well and that the application process moved too slowly. Mortgage lenders often made no effort to stop foreclosure proceedings on homeowners while the homeowners were waiting to find out if they qualified for assistance.
Consult an Attorney
If you are facing foreclosure, consult a lawyer experienced in stopping mortgage foreclosures to discuss all of your options for saving your home.