Advocates urge funds restored for mortgage relief

By Eric Mayes

In an 11th-hour plea, housing advocates are asking Gov. Tom Corbett to restore funding for the state’s Homeowners Emergency Mortgage Assistance Program – eliminated in his budget proposal and cut in the Republican proposal now moving through the state house.

“Over the next two weeks, I will be urging my colleagues to remember that keeping a family in their home is more than just good will. It’s good policy,” said state Sen. Christine Tartaglione. “It holds families together, which holds neighborhoods together, which holds communities together.”

HEMAP provides bridge loans, at zero interest until they find work, for the unemployed, allowing them to make mortgage payments for up to three years or until they find a job. Approximately 80 percent of loan recipients have been able to stay in their homes.

“It’s not like you just stop working and stop paying the bills,” said Sharon Greene, an unemployed homeowner working with the Philadelphia Unemployment Project to apply for a HEMAP loan. “Things happen. And keeping your home means keeping families together.”

The state program has been hailed as national model, particularly important during this recession.

In April, the Federal Reserve Bank of New York issued a policy statement that singled out the program urging federal lawmakers to use it as model: “HEMAP could help inform policymakers’ future efforts to address the problem of delinquent unemployed borrowers facing foreclosure.”

Just one month before the report’s release, Corbett had eliminated the program’s $11 million funding in his budget proposal. A Republican proposal now being debated in Harrisburg would restore $7.9 million of that money.

Advocates of the program say that isn’t enough, and want full restoration.

Tartaglione and others, including Bill Smith, a senior vice president for community investment at Citizens Bank, are calling for lawmakers to restore full funding.

“We unequivocally support funding for HEMAP,” said Smith, “HEMAP has been there to save the day.”

Tartaglione said the budget numbers have changed dramatically since Corbett released his budget with tax revenue above his projections.

“We have almost a $600 million budget surplus,” she said. “Taking away the help when it is needed the most is bad public policy that will create more budget problems than it solves.”

In 2010, there were an estimated 34,000 foreclosures in Pennsylvania, up 20 percent from 2009; and in Philadelphia, 5,802 foreclosure notices were sent in 2010. Pennsylvania ranked 34th in foreclosures.

In addition to allowing unemployed families to stay in their homes, advocates contend that the program saves money in the long run.

For a $210,000 mortgage, HEMAP costs the state about $1,620; a similar federal program for the same mortgage costs about $13,600.

The governor’s office did not return phone calls Monday.

Corbett and Republicans from both chambers have repeatedly said they will have a budget approved by July 1, the start of the new fiscal year and the traditional budget deadline – a deadline often missed during former Gov. Ed Rendell’s administration.

Created in 1983, HEMAP has provided $211 million in loans since its inception and generated $238 million in re-payments. More than 20,000 loans have been repaid with HEMAP support.

Others cuts currently being debated include deep cuts to state welfare department, which faces the loss of $471 million. Education cuts, though lessened in the Republicans’ proposed budget would still top out at $1 billion. And, medical assistance programs would be cut by $295 million.