Housing Advocates Want Pennsylvania's Cut of a National Settlement to Revive Foreclosure Prevention
Top state administrators say it's a bit too early to tell whether the commonwealth's cut of a nationwide mortgage services settlement could breathe life into a program meant to help Pennsylvanians avoid foreclosure.
This is not the first attempt to resurrect the Homeowners Emergency Mortgage Assistance Program (HEMAP). The program closed last July after its state funding was nearly eliminated.
Senate Democrats and housing advocates have suggested it receive some of the money from a settlement with five of the largest banks involved in home lending abuses. But state budget Secretary Charles Zogby said at this point, it's too soon to say if any portion of that could go toward HEMAP.
"That's ultimately to be decided, and we want to be in a position to make decisions when we know how much money we'll have as a state and when those dollars will be coming, so it may be a little premature to get out in front of ourselves on that," he said.
A spokesman for the Attorney General's office says the majority of the $266 million from the mortgage settlement will go toward individual lending fraud victims. $69 million of the settlement will go to the Attorney General's office, and an agreement on how that money is spent may not be finalized for another couple of months.
Housing advocates are among those pushing for the funds to be used to revive HEMAP.
"A strategic investment of funds in a program that prevents people from losing their homes or facing foreclosure through no fault of their own is very, very significant at this point in time. It's a safety net program; it's proven effective," said Liz Hersh with the Housing Alliance of Pennsylvania.
Hersh cited a recent report by the Reinvestment Fund showing that a $38 million investment over three years in HEMAP saved $480 million for state government, residents, local governments, homeowners, and financial services institutions.