Washington, D.C. – Nevada Senator Harry Reid today made the following statement on the news that the Obama Administration has approved the “Hardest Hit Fund” foreclosure prevention proposals. President Obama announced the fund during an event in Las Vegas in February following conversations with Reid that more needed to be done by the Administration to help struggling Nevada homeowners. Because of Reid’s persistence, Nevada will receive $102.8 million to fight foreclosures and help homeowners who owe more than their homes are worth. Nevada is set to receive the most funding per capita out of any of the five states that will receive funds from the program.
“I’ve been working hard to help stabilize Nevada’s housing market and provide resources for Nevadans who are struggling to keep their homes,” Reid said. “I told President Obama and Secretaries Donovan and Geithner that Nevada needs help and I thank them for responding. Now it’s up to banks and credit unions to step up to the plate so that this $100 million will have the maximum benefit for homeowners to reduce principal amounts and provide lien relief.”
Nevada will receive a total of $102.8 million in “Hardest Hit” funds to be used as follows:
· Nevada will create a mortgage modification program using a combination of forgiveness and forbearance with a goal of reducing principal to less than 115 percent of LTV (loan-to-value) and lowering payments to 31 percent of DTI (debt-to-income).
· The state will also offer assistance to reduce/eliminate second liens with earned forgiveness over a three-year term.
· Additionally, the state will provide allowances for appraisal and transaction fees, moving fees, a legal allowance for up to three months, and a combination of incentives for borrowers and servicers to facilitate short sales.