Mortgage Assistance Division

Foreclosure Assistance Division
sets new direction and adopts a new name
 

In order to better describe its current mission, the Arizona Department of Housing’s Foreclosure Assistance Division has changed its name to the Mortgage Assistance Division. As the mortgage foreclosure crises waned, the division found itself expending more resources and energy in assisting buyers to attain homeownership, than it did on foreclosure avoidance.

While the division has increased its focus on mortgage-related activities to promote homeownership, the division does continue to offer foreclosure assistance, and will do so as long as funding remains available for such assistance.

After years of working to keep people in their homes, it is a wonderful thing to see foreclosures become exceedingly rare, said Reginald Givens, Assistant Deputy Director of Operations, who has overseen the work of the division for the last decade. The Department is excited that it is once again able to promote homeownership opportunities, especially helping first time homebuyers.

In 2010, the U.S. Department of the Treasury declared Arizona’s housing market as one of the five hardest hit by the economic downturn which came to be known as the Great Recession of 2008. Along with that designation came a multi-million dollar grant, which resulted in the State beginning its very first foray into assisting homeowners avoid foreclosure. Prior to that time, Arizona had never seriously contemplated any need to provide widespread assistance to help households avoid foreclosure.

Due to this unfortunate designation, the federal government allocated Arizona over $296 million to address this crisis. With this resource, the Department established the Save Our Home AZ (SOHAZ) program. Uniquely designed to address Arizona’s most pressing foreclosure issues, it provided a wide array of assistance, since there was no one single reason for Arizona’s foreclosure crisis. Many homeowners needed assistance with principal reduction in order to entice them to stay in homes that carried severely underwater mortgages. Others needed ongoing mortgage assistance due to job losses and other reductions in income. A small number of homeowners simply wanted assistance to help facilitate a short sale, so they could move on and avoid a foreclosure.

By 2016, Arizona’s foreclosure rate had stabilized to pre-recession levels, so the Department petitioned the U.S. Department of Treasury to expand the use of its federal grant to allow homebuyer assistance, to address specific housing markets in the state that had not recovered like the state as a whole. With that request approved, the Department launched the Pathway to Purchase (P2P) program, which currently provides down payment assistance through participating private mortgage lenders.

Assistance through the federal Treasury grant will continue to be available through December 2020 or until the funds are fully committed, whichever comes first, and some forms of foreclosure assistance may continue to be available through June 2021. As the availability of this funding source will soon sunset, the Department will be looking for other resources and ways to assist Arizona’s homeowners.

Over the past nine years, the division has assisted over 10,000 low-to-moderate income households with mortgage assistance to help improve the health of Arizona’s housing market.

Information on the Save Our Home AZ foreclosure assistance program, as well as the Pathway to Purchase down payment assistance program is available on the agency’s website.

Housing Matters | Summer 2019