MONEY RELEASED TO HELP FIGHT FORECLOSURES

Robert MenendezU.S. Senators Robert Menendez (D-NJ) and Frank Lautenberg (D-NJ) announced that unemployed New Jersey workers will be eligible for a total of $112,200,638 in emergency assistance to help prevent foreclosures.  The federal Hardest Hit Fund, which makes funds available for programs to help homeowners struggling to make their mortgage payments due to unemployment, is being expanded to 17 states, and New Jersey is one of them.

“Being laid off through no fault of your own and losing your home as a result is a devastating one-two punch for any family,” said Menendez, who is the Chairman of the Senate Banking Subcommittee on Housing, Transportation and Community Development. “This investment keeps families affected by layoffs afloat on an emergency basis in a tough jobs market. It also prevents an additional wave of foreclosures, which would undercut the economic recovery neighborhood by neighborhood, community by community.”

“This critical federal funding will provide much-needed assistance to New Jerseyans who have lost their jobs and are fighting to keep a roof over their head,” said Lautenberg.  “Preventing foreclosures will keep families in their homes, benefit our local communities, and help rebuild our economy.”

This federal funding, totaling $2 billion among the 17 states and the District of Columbia, will arrive through the existing Housing Finance Agency (HFA) Innovation Fund for the Hardest Hit Housing Markets (the “Hardest Hit Fund”). Additionally, the U.S. Department of Housing and Urban Development (HUD) will soon launch a complementary $1 billion Emergency Homeowners Loan Program to provide assistance – for up to 24 months – to homeowners who are at risk of foreclosure and have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition.

President Obama first announced the Hardest Hit Fund in February 2010 to allow states hit hard by the economic downturn flexibility in determining how to design and implement programs to meet the local challenges homeowners in their state are facing. 

Under the additional assistance, states eligible to receive support have all experienced an unemployment rate at or above the national average over the past 12 months. Each state will use the funds for targeted unemployment programs that provide temporary assistance to eligible homeowners to help them pay their mortgage while they seek re-employment, additional employment or undertake job training.

States that have already benefited from previously announced assistance under the Hardest Hit Fund may use these additional resources to support the unemployment programs previously approved by Treasury or they may opt to implement a new unemployment program.  States that do not currently have Hardest Hit Fund unemployment programs must submit proposals to Treasury by September 1, 2010 that, within established guidelines, meet the distinct needs of their state.

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