July 8 (Source: By James Haggerty, The Times-Tribune, Scranton, Pa.) -The termination of a state program closes an important safeguard against mortgage foreclosures.The state Housing Finance Authority recently ceased its Homeowners Emergency Mortgage Program, which provided short-term financing to troubled householders potentially facing foreclosure. The current state budget cut HEMAP funding from $10.4 million to $2 million, which will be used to wind down the program’s financial obligations, said Scott Elliott, spokesman for PHFA.
“It wasn’t enough to keep it operating,” he said.
The state program has been replaced temporarily by federal funding, but HEMAP’s demise could increase the risk to homeowners threatened by foreclosure.
“It’s impacting families on the ground who are hurting,” said Michael Hanley, executive director of United Neighborhood Centers of Northeastern Pennsylvania, which provides services to needy people. “Its intention is to keep people in their home until they get on their feet. It’s a stopgap measure.”
UNC processed about 100 applications annually through the program, Mr. Hanley said.
“It’s just shortsighted to take this program off the table right now,” he said.
Mortgage foreclosures in the Scranton/Wilkes-Barre/Hazleton metro area increased from 1,358 in 2007 to 2,152 in 2010, a 58 percent jump, according to RealtyTrac, a Los Angeles-area company that compiles foreclosure data.
“We are still dealing with the foreclosure crisis, and we had an uptick in unemployment in May,” said state Sen. John Blake, D-22, Archbald, who opposed budget cuts affecting HEMAP. “We should be supporting this program, especially now.”
HEMAP, which was established in 1983 and became a national foreclosure-mitigation model, performed like a low-interest bridge loan, helping troubled homeowners and unemployed people settle mortgage delinquencies and covering their mortgage payments for up to two years.
HEMAP distributed about 2,800 loans valued at $28.9 million in the state’s last fiscal year, Mr. Elliott said.
“The impact is felt by people who need as many options as possible,” said Jesse Ergott, executive director of Neighborhood Housing Services of Lackawanna County, a nonprofit budget-counseling agency that assisted people with about 30 HEMAP applications annually. “It’s unfortunate at this point in time that such a great program has basically been wiped out by the budget.”
The state Housing Finance Authority, which provides low-interest residential development loans for low- and middle-income residents, senior citizens and people with special needs, obtained $105 million in federal funding in April for foreclosure-prevention financing.
The federal criteria and income guidelines, though, are stricter than HEMAP regulations and the funding will be available only until Sept. 30, Mr. Elliott said.
“We are doing everything we can to make the public aware that the money is here now, so don’t delay,” he said.
The Luzerne County Commission on Economic Opportunity, which assists poor people and promotes self-sufficiency, helped clients submit about 250 HEMAP applications annually, said David Ritter, director of the agency’s housing programs.
“We are very concerned about the impact of not having that available because of the high foreclosure rates we are seeing,” said Gene Brady, executive director of the commission.
“There’s definitely going to be an impact locally,” Mr. Ergott predicted. “It’s just one less weapon for us to use to fight foreclosures.”
Contact the writer: jhaggerty@timesshamrock.com
Source: By James Haggerty, The Times-Tribune, Scranton, Pa.
To see more of The Times-Tribune or to subscribe to the newspaper, go to http://thetimes-tribune.com/.
Copyright (c) 2011, The Times-Tribune, Scranton, Pa.
Distributed by McClatchy-Tribune Information Services.
For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com.
A service of YellowBrix, Inc. Publication date: 2011-07-08
