A Philadelphia judge ruled Monday that the city’s moratorium on foreclosure sales will end next week. Common Pleas Court Judge Pamela Dembe halted the sales in December to give distressed homeowners time to apply for a new federal aid program. But that help has stalled.
Congress enacted the Emergency Homeowner Loan Program in October; so far, no money has reached homeowners facing foreclosure. In fact, no applications have become available yet.
Pennsylvania is due to get more than $100 million, which could go to about 4,000 qualified state residents. Most of them would be unemployed, or underemployed, in order to qualify.
Bridesburg resident Jeff Lawhorn described the frustration, and despair, of the situation.
“I have borrowed from friends, loved ones, family and it’s all dried up. This is my only hope,” he said. “If this doesn’t go through, then I’m one of those people April 4. Then, where am I supposed to go, the street?”
Lawhorn, who said a car accident made him unable to work, said he’s still waiting to get his retirement payments approved. He went from making $80,000 a year as a police officer to getting $205 dollars a month in welfare payments.
Public interest lawyers argued for an additional two-month halt in sales of foreclosed residential properties. That would give Lawhorn and others like him more time to apply for the program. But more than a dozen attorneys for banks and mortgage lenders argued against extending the moratorium.
Attorney Steve Eisenberg, who represents creditors, proposed a compromise. Have the sales go forward, he suggested, then give the foreclosed-upon homeowners extra time to apply for the loan program.
“It’s a fair result. It’ll give those people who have a fair likelihood of hope time to go out and seek help, which they should do,” he said.
If a house is sold, the foreclosed-upon owner gets 90 days to apply for the federal loan program–if it becomes available. The problem is, most of those homeowners would not qualify for the troubled loan program.
Hoping for a reprieve, 9-year-old Darrea Brown attended the hearing with her grandmother. But their South Philadelphia house goes on the auction block April 5 and the loan program would not help save it.
“We’ve been living in it for 55 years. My whole family grew up in that house. And they got too many memories to move,” said the child. “And I know you probably haven’t been there before, but yeah, it’s pretty hard.”
Meanwhile, Republicans in Congress have voted to cancel the program. President Barack Obama has said he would veto such a bill if it gets through the Senate.