PA Mortgage Assistance Program is Revived

Aug 10, 2012

A successful mortgage assistance program in Pennsylvania that began nearly 30 years ago, but was zeroed out this fiscal year, is being revived. The Homeowners Emergency Mortgage Assistance Program (HEMAP) will receive funds from a $25 billion national mortgage settlement with five of the country's largest loan servicers. Ally/GMAC, Bank of America, Citi, JP Morgan Chase, and Wells Fargo were found to routinely sign foreclose notices without make sure their documentation was correct. Pennsylvania's portion is $66 million.

Brian Hudson Sr., Executive Director of the Pennsylvania Housing and Finance Agency said before the program ended, it was highly effective. "The state, since 1983 has appropriated about $246 million, and repayments have totaled about $271 million...we've lent almost a half billion dollars, and saved about 46,000 homes from foreclosure."

He attributed the ending of the program, which had already been cut back, to financial constraints as Harrisburg sought to balance its budget a head of the July 1 deadline.

HEMAP is meant for homeowners who are falling behind on their mortgage payments do to "no fault of their own" - typically because of job loss or a medical reason. The program will help to make mortgage payments for up to 36 months, and can lend up to $60,000. But Hudson noted the average borrower receives around $13,000. He said there are two types of loans, "let's say a homeowner has lost substantial income, and can make a portion of their mortgage payment, but can't afford to make all of it - the program will pay a portion of the mortgage payment. Then we have homeowners who have lost a job, but have gotten re-employed, but they're still in arrears with their lender. The program will do a one time arrears loan to get that homeowner caught up."

Hudson said he expects the settlement funds to carry the program for 3-5 years. HEMAP applications are now being accepted.