Settlement revives Pa. mortgage assistance program
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HARRISBURG -- A state mortgage assistance program shuttered last year due to budget cuts is being resurrected, thanks to an infusion of money from a lawsuit settlement.
The Homeowners' Emergency Mortgage Assistance Program is once again taking calls from beleaguered homeowners across the commonwealth. The program offers loans to those who have fallen behind on their monthly mortgage payments, bringing their balance current and subsidizing payments for up to three years.
To qualify, homeowners must be living in the property as their primary residence, have suffered a financial hardship that was not their fault, and have a reasonable prospect of being able to resume payments.
About 45,000 households have received help since the program's inception three decades ago. During the past few years, the HEMAP program was funded to the tune of about $11 million annually, allowing it to offer between 1,500 and 1,800 loans a year.
In Allegheny County, the number of loans has decreased over the past five years, from 212 in 2007 to 109 in 2010 and 92 last year. But new loans from the Pennsylvania Housing Finance Agency, which runs the program, were halted after last year's state budget reduced funding to $2 million.
But a $25 billion multistate settlement with the nation's five largest mortgage loan servicers now means that $66.5 million will be coming to Pennsylvania.
A measure the state Legislature approved in June outlines spending 90 percent of the funds, or about $60 million, on the HEMAP program over the next three to five years.
The remainder will be used for housing-related consumer protection programs through the state attorney general's office and for consumer legal assistance on housing matters.
"This multi-year funding for HEMAP will not only help troubled homeowners, but will play a role in restoring the health of our state's housing industry," Gov. Tom Corbett said.
Midway through last week, the PHFA had received about 200 calls from consumers about the HEMAP program.
PHFA spokesman Scott Elliott said the agency did not keep a waiting list when the program shut down last summer, but it kept contact information for several hundred people who have called since June 22, when legislation allocating the expected funds was approved.
Homeowners in need of mortgage assistance must complete an application through a local housing counseling agency.
An employee at ACTION-Housing, one of the 10 Allegheny County agencies on the PHFA list, said it had not yet had many calls about the restarted program.
"Every once in a while you would say you hope it will be refunded," said Mimi O'Donnell, who handles mortgage intake at ACTION-Housing. "People haven't really called back yet because they don't know it's available again."
More information is available by calling PHFA during business hours at 1-800-342-2397, or online at www.phfa.org/counseling/hemap.aspx.
First Published August 21, 2012 12:00 am