Phila. Project joins effort to restore Pa. mortgage assistance

By Eric Mayes

The coffin moved slowly south on Broad Street, passing in front of the Arch Street United Methodist Church on its way to City Hall where mourners — more angry than sad — gathered to bury the state’s Homeowner’s Emergency Mortgage Assistance Program, which had been killed in the new state budget.

“We are gathered here today to mourn the passing of a great program,” intoned the Rev. Randy Barge, pastor of the Olney Presbyterian Church. As he spoke, protesters waved signs and chanted, “Save our homes.”

The makeshift coffin was propped up against City Hall as Barge said he hoped HEMAP could be “resurrected.”

A coalition of groups from across the state – the Pennsylvania Save Our Homes Coalition — has been formed to revive the plan, pressing state officials from the governor to legislators to approve a $10 million infusion of cash to reinvigorate it.

“We got groups across the state who are joining together to remake this program a reality,” said John Dodds, director of the Philadelphia Unemployment Project. “We’re going to save this program for the people of this state.”

This year’s budget included just $2 million for the program, down from $11 million last year. This was not enough for it to continue operation, making the program dead on arrival on July 1, the start of the new fiscal year.

Though the 50 or so people gathered near the coffin were sad to see the program end, they were angry too. State Rep. Cherelle Parker noted that the state has a budget surplus of $785 million and yet neither the governor nor the state legislature could see fit to fund HEMAP in the $27.1 billion budget. The program was slashed even though the state has a 7.6 percent unemployment rate and the city has a 10.1 percent unemployment rate — meaning that, more than ever, people need help to stay in their homes.

“It helped people to stay in their homes when they found themselves facing uncertainty,” Parker said. “The home is the most valuable asset that working class people, that middle class people have been able to obtain. Unfortunately, all of us don’t live a country club life style. The most important investment that we make in our lives is the investment that we make in our homes.”

HEMAP provided bridge loans, at zero interest until unemployed homeowners find work, 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. 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.

In addition to allowing unemployed families to stay in their homes, advocates contend that the program actually saved the state 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.

When the program ended, there were 6,000 people waiting for assistance.

Funding for a similar federal program ends Sept. 30, meaning that struggling homeowners will have no place to turn.

Legislators — national legislators — had no trouble helping banks and businesses in 2008, said Lance Haver, consumer affairs advocate for Philadelphia.

“They didn’t have any trouble bailing out the banks. They didn’t have any trouble bailing out the investment firms,” said Haver. “All of a sudden they don’t have the money to help us out. They are punishing people who have already been punished by the economy.”

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.

It’s a broad problem, said Director of Consumer Credit Counseling Services Patty Hasson, affecting more than just the unemployed and struggling homeowner.

“When your neighbor loses their home the value of your home goes down,” she said.