Freddie Reallocates More Funds to Boost Short Sales

Money used for a federal program aimed at helping 18 hard-hit housing market states can now reallocate its funds to help home owners complete short sales or other foreclosure alternatives, Freddie Mac announced Monday to mortgage servicers.

Mortgage giant Freddie Mac, along with Fannie Mae, has recently placed more focus on helping home owners complete short sales to avoid foreclosure. (Read more: Fannie, Freddie Speed Up Short Sales)

The Hardest Hit Fund reportedly has been an underused program by 18 states and the District of Columbia. The program is to provide home owner assistance to states through loan modifications, short sales, unemployment assistance, and mortgage principal reduction. But only 3 percent of the funds for the $7.6 billion program has been used as of Dec. 31.

Some of that money can now be allocated to helping more distressed home owners, including borrowers for short sales, deed-in-lieu of foreclosure, or relocation assistance, according to Freddie Mac.

Source: “Freddie Directs Servicers to use Hardest Hit Fund in Short Sales,” HousingWire (April 23, 2012)