Over the last several months, many Homeowner Assistance Fund (HAF) programs were approved by the U.S. Department of the Treasury and opened up for applications. Some states that have not yet begun accepting applications will likely do so soon. According to Stockton Williams, Executive Director of the National Council of State Housing Agencies, the council expects all programs to be open by June.
As struggling homeowners look to take advantage of the financial relief available through the HAF programs, the state housing finance agencies (HFAs) responsible for distributing the funds are preparing for a flood of applications.
Here’s how your HFA can prepare for the work ahead and effectively provide homeowners with the assistance they need.
The Complexities
Staffing plays a big role in successfully managing the HAF application process. You need to have the necessary resources on-hand to handle the flood of applications coming in. Without sufficient staffing, you risk failing to efficiently review and approve applications and get funds into struggling homeowners’ hands.
In addition to maintaining the necessary resources, housing finance agencies must adequately coordinate with mortgage servicers. The application process requires documentation from servicers to determine borrowers’ eligibility for the funds. Unfortunately, obtaining this documentation quickly has not been easy and has led to lengthy turnaround times for agencies that have already started accepting applications.
The Urgent Need
The complexities of the process don’t outweigh the urgent need for the funds as homeowners exit forbearance and struggle to avoid foreclosure.
According to the Mortgage Bankers Association’s (MBA) monthly Loan Monitoring Survey, approximately 705,000 borrowers in the U.S. were in active forbearance plans at the end of 2021. By March 31, this number had decreased to 525,000.
Many of the homeowners who have exited forbearance programs are still under financial strain and, as a result, face the threat of foreclosure. ATTOM’s Q1 2022 U.S. Foreclosure Market Report provides proof. It reveals that the number of foreclosures rose 39% from the final quarter of 2021.
HAF programs can provide borrowers with the financial assistance they need to prevent foreclosure. The problem is that borrowers need the assistance now.
The Increase in Awareness
In a March 14 blog post, the CFPB encouraged mortgage servicers to play an active role in helping homeowners access HAF assistance in order to avoid foreclosure. While participating in the programs is not mandatory, servicers are required to provide borrowers with key HAF-related information. For instance, they must explain how borrowers can communicate with them throughout the HAF application process.
As borrower awareness of the programs grows, the number of applications and demand on housing agencies will also increase. Keep this in mind as you get ready to execute your HAF program.
The Right Partner
If your HFA is feeling overwhelmed, you’re not alone…but you are in luck.
MetaSource can help. We have unmatched experience working with HFAs and our team of mortgage industry professionals is here to help you get funds to homeowners quickly and efficiently.
We can provide you with the staff augmentation, information technology, and expertise you need to expedite the process of helping borrowers avoid foreclosure – even when coordination challenges threaten to slow you down.
If you’re not getting the help you need, or if your workload has begun to outpace the help you have, do what other state housing agencies across the country have done and turn to the professionals at MetaSource.
Let’s Get Started
Ready to engage? Contact MetaSource today to learn how we can help you quickly and smoothly allocate funds with reliable, cost-effective outsourced help.