After being suspended for a year due to lack of funding, Pennsylvania’s emergency foreclosure relief program is coming back.
Gov. Tom Corbett signed the measure Friday, but with a yearlong backlog and local foreclosure rates climbing, is the system ready to handle an influx of applicants?
Say you’re a Pennsylvanian who received a foreclosure notice in the spring of 2011. At the same time, you would have received an ACT 91 notice that gave you 30 days to seek assistance through the state’s Homeowners Emergency Mortgage Assistance Program or HEMAP.
The program worked like this: Show you’re capable of getting back on your feet, and the state would loan you money to cover your mortgage, money you’d eventually have to pay back with interest. Since its inception in 1983, the program has helped 46,000 families keep their homes, boasting an 85 percent success rate of those enrolled in the program. But that changed in July, when Corbett slashed HEMAP’s budget to the point that the program couldn’t accept any new applicants.
What did that mean for Pennsylvania’s housing market?
“What it meant was that people who might have been able to save their homes, lost them,” said Nancy Szamborski, executive director of the Bucks County Housing Group.
“People who were foreclosed upon would lose their homes due to death, to disability, to marital breakup, to some sort of calamity, and there was no safety net,” Szamborski said.
She says now that state lawmakers have agreed to bring HEMAP back by using 90 percent of the money Pennsylvania was awarded in the national “robosigning” lawsuit – about $66 million — her office will be ready to serve.
Joseph Philipski of the New Kensington Community Development Center agrees. But considering this year’s rise in foreclosure rates, he expects to be very busy helping people apply.
“There will be a pretty big backlog of individuals that will probably be making applications, so, it’s a good thing,” said Philipski. “Even though it will be a very heavy volume, hopefully we can help some more people that haven’t been able to receive that help in the past.”
So does this mean homeowners facing foreclosure could apply for HEMAP assistance today? Not exactly.
The Pennsylvania Housing Finance Agency (which administers HEMAP) is still working out the details of the reinstated program and hasn’t yet released the new application form. Those details are expected to be finalized later this week or next.
Since its inception, HEMAP has dispersed roughly $501 million to families seeking mortgage relief. Of that figure, roughly $270 million has been paid back, the entirety of which has gone back into the HEMAP’s operating budget.