State Foreclosure Mitigation Strategies: A Comparison of Round 1 and 2 Hardest Hit Fund Plans in States with Nonjudicial Foreclosure Processes

Abstract

This paper seeks to identify the how the seven Round 1 and Round 2 Hardest Hit Fund (HHF) states with predominantly nonjudicial foreclosure systems formulated their HHF strategies in response to the foreclosure crisis as it is playing out in their respective states. While the focus here is on nonjudicial states, some general lessons about how state governments responded given significant resources and given their varied nature of the crisis across regions are likely to be applicable to judicial foreclosure states as well. A major goal of the paper is to glean the strategic responses of these states after receiving substantial – if perhaps still inadequate – resources to deal with continuing high rates of foreclosure. Understanding some of the thinking and strategies that these states went through may be of helpful to other states and local communities in formulating programmatic responses at foreclosure mitigation. Of course, the key ingredient that enabled these plans has been the flow of significant federal funds, and many communities around the country do not have access to such funds – or at least funds of this magnitude. Nonetheless, when resources are available – or if they become available – understanding the development of these plans may be helpful in the formulation of strategies in other places.