CALL 6: Mortgage program stops taking applications amid funding trouble

Fund helps Hoosiers avoid foreclosure
Posted at 8:00 PM, Jul 05, 2017
and last updated 2017-07-05 20:00:57-04

INDIANAPOLIS -- A program that helps Hoosier families avoid foreclosure has stopped taking applications, Call 6 Investigates has learned.

The Indiana Hardest Hit Fund has provided $140 million to 9,300 Hoosiers in all 92 counties.

The federally funded program in 18 states and the District of Columbia provides help to struggling homeowners through modification, mortgage payment assistance and transition assistance.

The Indiana Housing and Community Development Authority, the state agency that administers the program, stopped accepting applications on June 30 at 5:01 pm.

“It’s bad news for homeowners in Indiana,” said Andrew Ault, a foreclosure prevention attorney and staff attorney with Indiana Legal Services. “It’s a sad day.  The Hardest Hit program has helped so many people in Indiana get back on their feet from unemployment or illness or other issues in their life.”

Ault said fewer and fewer options are available for Hoosiers who are struggling to pay their mortgage and stay out of foreclosure.

“I think people are going to lose their houses in many cases, or try the lender based modification programs which are often successful but the government has cut back on those too,” said Ault.

Call 6 Investigates received an email from a concerned citizen who said the state did not do enough to notify Hoosiers about changes to the program.

“That leaves Hoosiers missing what could be vital assistance in keeping their homes,” read the email from the concerned citizen. “This cut-off date was not publicized in advance through the program's website or through the Indiana Housing and Community Development Authority (IHCDA), which oversees the program.”

The agency’s website now shows it will no longer accept new applications.

IHCDA spokesperson Brad Meadows said while they did give the public advance warning, they did said they did provide notice to housing counselors, so they could ensure applications were submitted prior to the deadline.

“Homeowners currently enrolled in the HHF and receiving assistance will not be affected,” said Meadows. “All homeowners who are approved for HHF assistance will receive the funds they have been promised.”

Meadows said they paused the processing of HHF applications starting in April 2017.

“We wanted to ensure that our funds would stretch as far as possible, to assist as many homeowners as we could,” said Meadows. “The HHF program is designed to recycle funds from homeowners who exit the program early, before their full assistance is provided. Due to this fact, our available funds fluctuate frequently.”

Meadows said they analyzed the program’s “complex data” and determined they must stop accepting applications.

“HHF has done what it’s supposed to do–help thousands of Hoosier homeowners prevent avoidable foreclosure through mortgage payment assistance,” said Meadows. “If surplus funds become available, we will resume accepting applications for reinstatement-only assistance.”

Homeowners in need of assistance should reach out to their lender, said Meadows.

Call 6 Investigates reached out to the U.S. Treasury, the federal agency that oversees the program, for comment but did not get a response.

According to MIBOR Realtor Association, the number of foreclosed homes in inventory is at its lowest level since 2004.

Ault said the number of foreclosure filings has remained steady, and many homeowners are still struggling with losing their homes.

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