Pa. loan program helps jobless keep their homes

Unemployed homeowners facing foreclosure in Pennsylvania have an extra tool in their kit of options to prevent foreclosure -- a state loan program that can bring their mortgage current and provide payment subsidies for up to 24 months.

The program is called the Homeowners' Emergency Mortgage Assistance Program (HEMAP). Authorized by the Pennsylvania General Assembly in 1983 and administered by the Pennsylvania Housing Finance Agency (PHFA), HEMAP extends loans to Pennsylvanians who, through no fault of their own, find themselves unable to make their mortgage payments and face losing their homes to foreclosure.

Eligible Pennsylvanians can receive either loans to bring their mortgages current to a specified date, known as "non-continuing" emergency mortgage loans, or loans that bring their mortgages current and provide monthly mortgage payment subsidies, known as "continuing" mortgage loans. Loans are available for up to $60,000 in total assistance or 24 months from the date of delinquency, whichever comes first. Recipients must contribute at least $25 a month or up to 40 percent of their net monthly income to their housing expenses. Recipients pay their contribution to HEMAP, which pays the mortgage holder.

Borrowers approved for the program must undergo a review of their finances annually. Repayment of the loans must begin within 36 months of approval.

The program, the only one of its kind in the country, boasts an enviable success rate: 80 percent of recipients have avoided foreclosure. Since its inception, the loan program has loaned $450 million to 43,000 homeowners across Pennsylvania. State funds and loan repayments finance the program.

HEMAP has attracted national attention as the federal government explores other ways to help homeowners avoid foreclosure. Last month, the Obama administration awarded $1.5 billion to help jobless and underwater homeowners in the five states hardest hit by the housing market collapse -- Arizona, California, Florida, Michigan and Nevada. Officials in three of the states, California, Michigan and Nevada, have been in touch with PHFA Executive Director Brian Hudson about replicating the Pennsylvania program in their states.

Written by Sandy Smith
For HULIQ.com