Homeowners Assistance Fund “Won’t Succeed Without Maintenance Staff”



Mortgage companies should be actively involved in distributing money from the Treasury’s Homeowners Assistance Fund to help borrowers successfully, the former housing official urged during a virtual event on Thursday.

While states are effectively responsible for making payments, the effectiveness of HAF depends on how it affects loan outcomes, Brian Montgomery, a former deputy secretary of the Department of Housing and Urban Development, said during a panel discussion on Padgett Law Group.

Consequently, it “will not be successful without the involvement of the maintenance staff,” said Montgomery, who is currently chairman and founder of Gate House Strategies.

Mortgage firms are understandably fearful of the additional responsibilities associated with another government program while they are retooling processes in preparation for end of the prohibition of redemption and related rule changes, but they really need to be involved, he said.

Service professionals usually calculate what loss mitigation options are available to troubled borrowers with expiring pandemic suspension payments based on available funds. Thus, the question of whether the money in the amount of HAF will come in may play a role in the fate of 1.86 million borrowers who are in arrears. Most of the homeowners involved have government-linked loans, according to Black Knight. These include mortgage loans from government-sponsored Fannie Mae and Freddie Mac businesses, as well as loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. A smaller proportion of private loans are held in bank portfolios or are part of private label securitization.

The states have until July 31st, when the moratorium ends, to organize their HAF allocation plans, with some having complex criteria, including trial periods and reapplications for additional funds aimed at low- and middle-income borrowers. According to Candice Roosell, vice president of Carrington Mortgage Services, trying to figure out how to minimize losses with moving money can be an “organizational nightmare.”

However, states are working hard to develop a single application so that consistent processes can evolve over time, according to Faith Schwartz, founder and CEO of Housing Finance Strategies.

“There’s a little chaos, but there [also] flattens a little, ”she said.


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