Housing aid may be cut

Money may or may not be available for a state program that has been helping people make their mortgage payments since 1983.

Gov. Tom Corbett did not include any funding for the Pennsylvania Housing Finance Agency's Homeowner's Emergency Mortgage Assistance Program, or HEMAP, in his proposed 2011-12 state budget.

However, House members have introduced an amendment that would restore more than $7.8 million to the program - which received $10.5 million for 2010-11 - and the Senate is considering an amendment to restore funding as well, PHFA spokesman Scott Elliott said.

"Until the state budget is passed, we have to assume the program will have to be shut down," Elliott said.

The agency projects that the money available in the fund will be insufficient to pay out on new applications that are expected to be received after June 30 and at the same time to continue making disbursements on behalf of mortgage holders previously approved.

The program aids homeowners who, through no fault of their own, are financially unable to make their mortgage payments.

Program participants receive loans to bring delinquent payments current and may be eligible for continuing payment assistance for as long as 24 months, or 36 months during periods of high unemployment. Under the program, mortgage payments are made directly to lenders on the homeowners' behalf.

The program has helped many people.

"HEMAP has been in existence for 28 years, and we have helped save the homes of 45,700 families from foreclosure," Elliott said. "With the recent downturn of the economy, there are families hurting financially because of layoffs and underemployment.

If the program does not receive funding, those families would not be able to be helped, Elliott said. If homes are foreclosed, that also hurts surrounding values and consumer confidence. It is like a ripple effect, he said.

"There is definitely going to be a higher risk for foreclosures with a loss of funding," said Tyler Port, senior loan officer for Cobblestone Mortgage and Financial Services LLC, Duncansville.

Liz Hersh, executive director of the Housing Alliance of Pennsylvania, is not happy about the lack of funding for the program.

"I think it is penny-wise and pound-foolish. What we are seeing are foreclosures tied to job loss. One out of 10 people who want to work can't find a job," Hersh said. "If this is eliminated, people who are hard hit are having yet another safety net program pulled out from under them."

Hersh said the program has been very effective.

"It has been 85 percent effective in saving homes. The state has been repaid more than it has loaned out," Hersh said. "We think that the program is something that should be sustained."

Meanwhile, Pennsylvania has been approved for some federal money to help deal with foreclosures.

Corbett announced in April that Pennsylvania has been approved by the U.S. Department of Housing and Urban Development to receive $105 million to aid homeowners facing foreclosure through the Emergency Homeowners' Loan Program.

However, Elliott said that program has stricter requirements and the money must be used by Sept. 30.

"We have been told that the federal Emergency Homeowners' Loan Program definitely will not be extended beyond Sept. 30 of this year," Elliott said. "If HEMAP isn't funded, then after Sept 30 we will have no federal or state money to use for foreclosure assistance. This will happen at a time when foreclosures in the state are expected to stay elevated at least until 2013."

Elliott said anyone with questions should call the agency's toll-free number 800-342-2357.

"Our goal is to help families to avoid foreclosure, that is what it is all about," Elliott said.