Sunday, March 6, 2011

Homeowners urged to apply for federal aid

Applications aren't pouring in for Arizona's share of federal funds to help unemployed or underemployed homeowners pay their mortgage.

Only eight homeowners have applied for aid from Arizona, funded by more than $36 million from the Hardest Hit Housing Program, since the effort was launched at the end of January. People struggling to pay their mortgages because they have lost jobs or part of their incomes can receive aid to cover their monthly payment for up to 24 months through the program.

Mike Trailor, Arizona's Housing Department director, is encouraging more homeowners to apply for the aid. Homeowners can receive up to $50,000.

He also said the agency is trying to change the requirements homeowners must meet to receive the funds so more people are eligible.

Currently, a homeowner who took out a second mortgage for anything besides purchasing the house isn't eligible for the unemployment mortgage-payment aid or the principal-reduction, loan-modification program.

Of the eight homeowners who have applied for the unemployment mortgage assistance, two were denied because they had second mortgages not used to buy the home or had refinanced and cashed out their home's equity.

Arizona has been allotted $268 million from the federal government's Hardest Hit plan to help people avoid foreclosure. Most of the state's funds are pledged to loan modifications. So far, only one Arizona homeowner has received a principal-reduction modification through the program. But Bank of America, the nation's largest lender, has agreed to begin working with the Housing Department on matching principal reductions to lower Arizona borrowers payments and help them avoid foreclosure.

A 20-year low

Housing analyst RL Brown called January a "statistically lousy month for new homes in metro Phoenix."

In January, 358 new-home permits were issued in the region, a 20-year low for the month. New-home sales totaled 387.

Brown and Greg Burger, publishers of the "Phoenix Housing Market Letter," drew a record crowd to their housing-forecast event last month. Many in the homebuilding industry are trying to figure out when the market will improve.

Brown and Burger do expect better results for the homebuilding industry in 2011.

by Catherine Reagor The Arizona Republic Mar. 2, 2011 12:00 AM

Homeowners urged to apply for federal aid

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