Mortgage help line connects needy with federal assistance
Brian A. Hudson, Sr., executive director and CEO of the Pennsylvania Housing Finance Agency, answers questions Monday at a news conference about aid to homeowners facing foreclosure. In the background is Allegheny County Executive Dan Onorato.
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Told on Monday that there's a new program to avoid foreclosure, Debbie McManus wasted little time before dialing the just-inaugurated 211 help line.
Ms. McManus has struggled for years to save the McKeesport home in which she grew up, which is now occupied by her sister but burdened with a predatory loan of around double its value. Since her brother-in-law's death in April, the family has fallen behind on the mortgage.
"It's been devastating," Ms. McManus said. She hoped the new Emergency Homeowners Loan Program, backed by a $105 million pledge by the federal Department of Housing and Urban Development to Pennsylvania, might be the solution to the family's struggles.
The Pennsylvania Housing Finance Agency is rushing to find homeowners whose troubles fit the federal program's parameters before a Sept. 30 application deadline. It has been taking applications since April 1 but has so far committed only $27 million to 700 approved borrowers, giving it less than three months to find homes for nearly $78 million.
"The name of the game is to try to reach as many homeowners as possible," said Brian A. Hudson, executive director of PHFA. Those whose mortgage payments are at least three months behind -- and who suffered income dips of 15 percent or more due to job loss, a cut in hours or an illness -- can get their arrears paid and 24 months of mortgage payments covered. The maximum available to any homeowner is $50,000, and it comes as a loan that disappears after five years if the homeowner stays in the home.
"We all know that foreclosure destroys families, destroys communities and destroys neighborhoods," Mr. Hudson said. Helping homeowners before sheriff's sale is a good investment, he said.
The state hopes a new United Way of Allegheny County effort will direct struggling homeowners to the program.
The United Way just launched a human services help line for the 11-county Southwestern Pennsylvania region, for anyone who is having problems with housing, utilities, health care or job hunting. People can dial 211 or 1-800-552-4171.
Allegheny County Executive Dan Onorato called the 211 line the most important news of the day, because it makes it easy for area residents to get referrals to agencies that can help them. "Most people have no idea where to turn," he said.
Ms. McManus said her sister got in trouble in 2000, when she was persuaded by Steel City Mortgage Services to refinance the house for much more than its true value.
Steel City's principals, Jay Berger and Vasilia Klimantis, have pleaded guilty to federal charges of wire fraud and money laundering in relation to their mortgage business and are awaiting sentencing.
"We tried everything," Ms. McManus said, including bankruptcy and working several jobs to make payments. Her brother-in-law's death -- two years before her 58-year-old sister can collect widow's benefits -- made the situation impossible.
Making matters worse, the state's Homeowners Emergency Mortgage Assistance Program is no longer accepting applications, due to budget cuts. In light of that program's closure, the federal money comes at an opportune time, officials said. "It will help many of our folks who are the most vulnerable in this community," said Michael Dear, president of Action Housing.
First Published July 12, 2011 12:00 am