How the Homeowner Assistance Fund may affect foreclosures

The Treasury’s Homeowner Assistance Fund could go a long way toward reducing foreclosures as they slowly restart — depending on when it arrives and how it’s distributed.

The most optimistic estimates from Black Knight suggest the nearly $10 billion in American Rescue Plan Act funds could pay for 30% of the increase in missing mortgage principal-and-interest payments since the pandemic began, with variations by state.

But when and how the money will actually be used — and who gets it — depends on how fast state plans materialize. They are due for submission to the Treasury by a recently extended and flexible Aug. 20 deadline, which presents a conundrum for servicers as loan workouts get underway in the next few weeks.

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