Mortgage help has arrived; 12,000 households to get $38.5 million

Lon DeWeese's phone started ringing 10 minutes after President Barack Obama landed at McCarran International Airport a year ago and announced that Nevada would receive more than $100 million in "hardest-hit funds" from the federal government.

The first phase of the program is finally being rolled out to day in Southern Nevada, said DeWeese, chief financial officer of the Nevada Housing Division.

The Mortgage Assistance Program will provide $38.5 million to more than 12,000 households in Clark County, paying up to $500 a month in mortgage assistance for six months.

The program is targeted toward low- and moderate-income homeowners who are unemployed or underemployed, someone whose income has been reduced by 50 percent or more, perhaps from a spouse's loss of employment, DeWeese said.

Other parts of the hardest-hit funds program such as first mortgage principal reduction, second lien relief and accelerated short sales are coming later this month.

One of the eligibility guidelines for principal reduction and second lien relief is 115 maximum principal balance for loan to value after receiving assistance.

"We're aiming for those most desperate first," DeWeese said. "Our overall goal here is home retention. We look at who's most vulnerable, the unemployed and underemployed. Our second goal is to get the money out as quickly as we can in a prudent way. We want to make sure it's going to legitimate, well-underwritten cases."

Homeowners cannot be in foreclosure or be pursuing legal action against the participating lender in order to receive the funds. Also, their mortgage balance can't be more than about $400,000.

Homeowners are encouraged to visit www.nevadahardesthitfunds.org or call (855) 428-HELP to determine if they're eligible for the funds.

Criteria for mortgage assistance include owner-occupied home; loan that originated before 2009; documented financial hardship; 120 percent median income maximum; imminent default; and current unemployment or underemployment.

"We don't want to waste people's time," DeWeese said. "We don't want to create false expectations."

Those who apply for the funds in March and provide all the paperwork on time with verification should be able to qualify for assistance on their April mortgage payment, he said.

The hardest-hit funds come from the Troubled Asset Relief Program, or TARP, which is part of the Emergency Economic Stabilization Act. Funding was expanded from the five original states (Nevada, Arizona, California, Florida and Michigan) to 19 states.

More funding was added for Nevada, the state with the highest foreclosure rate, bringing the total to more than $150 million. The U.S. Treasury selected the nonprofit Nevada Affordable Housing Assistance Corp. to disburse the funds.

DeWeese, a board member of NAHAC, said the organization had to pass "readiness assessment" by the Treasury and pilot testing in Washoe County last month before the final release of funds. It was part of the "triage process" to determine underwriting eligibility, he said.

The phased rollout is intended to ensure adequate allocation of resources and proofing of vital systems after "hard lessons" learned by the Treasury in other mortgage assistance programs, he said.

All but one of the top 10 banks are in contract or negotiations to participate in the Mortgage Assistance Program, DeWeese said. They include Bank of America; CitiMortgage; GMAC; Greater Nevada Credit Union; JP Morgan Chase; and Wells Fargo.

The problem for Clark County is that about 60 percent of the mortgages are held by Fannie Mae and Freddie Mac, government-sponsored enterprises that won't participate in principal reduction because of the impact on taxpayer dollars, DeWeese said.

The hardest-hit funds are expected to help nearly 23,000 Nevada families stay in their homes and slow the decline of neighborhood home values.

"In addition to creating jobs, our top priority must be to help keep struggling Nevada families in their homes, which is why I helped secure more hardest-hit funding for Nevada per capita than any other state in the union," Sen. Harry Reid, D-Nev., said in a statement from Washington. "We need to get this money out the door as soon as possible to provide relief for those Nevada families fighting to keep a roof over their heads."

DeWeese added, "When you think about it, if we can prevent a foreclosure, we can help stabilize the community and lessen the decline of real estate values by keeping people in their homes."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.