RI to Receive Additional $9.68 Million in ‘Hardest Hit’ Funds to Prevent Foreclosures & Protect Neighborhood Home Values

CRANSTON, RI – In an effort to keep families in their homes and minimize
foreclosures, U.S. Senator Jack Reed today announced an additional $9.68 million in
foreclosure prevention funding will be coming to Rhode Island from the Hardest Hit
Fund (HHF) program at the U.S. Treasury Department. Reed wrote to U.S. Treasury
Secretary Jacob Lew in January urging the additional HHF resources for Rhode Island,
citing the continued need for foreclosure prevention assistance in the state.

The Hardest Hit Fund is a flexible source of federal aid that has been used in Rhode
Island to help protect neighborhood home values, help unemployed homeowners remain
in their homes while they search for new employment, and for other programs to
encourage sustainable and affordable homeownership.

“I am pleased Treasury is providing additional Hardest Hit funding to Rhode Island.
These funds will help stabilize the housing market while keeping more families in
their homes and minimize further foreclosures that can really burden neighborhoods.
This additional federal funding is good news for Rhode Island and will be a big help
for homeowners and communities still looking to get back on their feet,” said
Senator Reed, a senior member of the Senate Banking Committee, which oversees
federal housing policy, and the Ranking Member of the Appropriations Subcommittee
that oversees the funding for federal housing programs.

The housing crisis that began in 2007 led to unprecedented home price declines, as
well as sustained and higher unemployment in certain parts of the country. Families
in these areas were particularly hard hit by the crisis as they have struggled to
make their monthly mortgage payments and grappled with deeply underwater mortgages.
According to the Mortgage Bankers Association National Delinquency Survey for the
third quarter of 2015, Rhode Island was among the top ten states with the highest
percentage of loans in foreclosure. Rhode Island’s percentage of loans in
foreclosure is more than 36% higher than the national average, and its serious
delinquency rate is more than 38% above the national average.

First announced in February 2010, the HHF program provided federal funding to the 18
states most affected by home foreclosures to develop locally-tailored programs to
assist struggling homeowners in their communities. Under the original formula
proposed by the Obama Administration in 2010, Rhode Island would have been excluded
from the HHF program. Senator Reed successfully fought to adjust the formula to
include Rhode Island,
arguing
that the Administration didn’t fully take into account how hard states like Rhode
Island had been hit by the foreclosure crisis.

To date, Rhode Island has received $79 million in HHF dollars to help prevent
foreclosures and stabilize the state’s housing market. Since its launch in December
2010, more than 5,300 Rhode Island homeowners have sought HHF counseling, and more
than 3,300 homeowners received assistance from the program, according to Rhode
Island Housing. At one point, the state program stopped accepting applications due
to insufficient funding, but the Consolidated Appropriations Act of 2016 made
another $2 billion in HHF assistance available to the states.

In addition to the nearly $10 million in federal funding announced today, Rhode
Island will have an opportunity to apply for approximately $39 million in additional
HHF resources if the state demonstrates need and the ability to quickly deploy these
funds effectively.