Home Foreclosure Help

The Soon-to-Evaporate Help for At-Risk Homeowners in 32 States

If they qualify, homeowners can get interest-free loans to pay a portion of their monthly mortgage, as well as back payments and legal fees, for up to $50,000 or two years, whichever comes first. The loans do not have to be repaid, as long as the homeowner continues making mortgage payments on time for five years. The program is expected to help from 20,000 to 30,000 distressed homeowners.

The program, known as the Emergency Homeowners’ Loan Program, is available to homeowners ineligible for the larger, $7.6 billion “hardest hit” fund , which provided assistance to 18 states that absorbed the worst of the housing crisis.

There are some hoops to jump through though. To qualify, homeowners must be at least three months delinquent on their home loans and have suffered at least a 15 percent income reduction from a job loss due to economic or medical reasons. Other requirements, like income limits, also apply.

To make sure the emergency funds are used up by Sept. 30, the end of the federal fiscal year, there are tight deadlines to meet. Homeowners must submit preliminary applications for the funds by July 22, less than four weeks away. The counseling agencies will screen the applications and submit the names of eligible homeowners to NeigborWorks for review. Because demand is expected to outstrip available funding, finalists likely will be selected by lottery.

Homeowners whose applications are chosen by the lottery will be contacted and given a short period of time, possibly just five days, says Michelle Jones, senior vice president of counseling at CredAbility, to fill out a full application and provide supporting documentation of their eligibility. The list of required documents includes nine separate items, like a letter terminating your employment and a notice of delinquency from your lender. If homeowners fail to meet the deadline, the next name on the list will be contacted.

“It’s a short timeline,” says Ms. Jones, so homeowners shouldn’t wait until they receive news that their application is selected via the lottery to begin gathering their paperwork.

To help make sure only those who are eligible make the first cut, the screening application asks if homeowners had been able to meet their mortgage payments before the job loss. The goal of the program is to help people who can be expected to resume making their payments once the economy improves and able to find work or their health improves. If they were having trouble paying their loan even when they were employed, they are unlikely to benefit from temporary assistance, Ms. Jones says.

State housing agency secures $619696 grant to expand home foreclosure

The Texas Department of Housing and Community Affairs (TDHCA) today announced that the state has secured a $619,696 federal grant that will significantly further its efforts to reduce the number of home foreclosures across Texas and help stabilize families, declining home values, and local government coffers.The grant, awarded through the National Foreclosure Mitigation Counseling (NFMC) Program – Round 5, will provide counseling to potentially as many as 1,500 Texas homeowners in or facing a home foreclosure and help them avoid foreclosure.

TDHCA will jointly administer the funds with the Texas State Affordable Housing Corporation (TSAHC), a nonprofit organization charted by the Texas Legislature for the promotion of affordable housing, to bring aid to 13 local and regional nonprofit agencies providing direct foreclosure prevention counseling to their clients.

TDHCA and TSAHC each committed $25,000 in matching funds to help secure the grant; combined with the $73,000 in financial and in-kind match contributions from counseling agencies at the local level, Texas’ contribution of $123,000 will help leverage the $619,696 in federal funds.

“We are extremely pleased to receive news of this award allowing TDHCA and its partners to continue working to blunt the devastating effects foreclosures have on the families and neighborhoods that comprise our great State,” said Michael Gerber, TDHCA Executive Director. “TDHCA feels this is an excellent return on State resources, and we pledge to maximize the benefits this grant will bring.”

“We are excited that Texas has been awarded a substantial grant through the NFMC Program to help prevent home foreclosures in Texas,” said David Long, TSAHC President. “We know foreclosure prevention counseling is effective and we will continue to partner with TDHCA to secure grants, like NFMC, to provide Texas families who are struggling to keep their home with free counseling from nonprofits that specialize in guiding a family through this difficult process.”

The local nonprofit agencies receiving a portion of these funds include: Habitat for Humanity, Business and Community Lenders (BCL) of Texas, and Frameworks Community Development Corporation, all of Austin; Consumer Credit Counseling Services of South Texas, Corpus Christi; North Texas Housing Coalition and Garden State Consumer Credit Counseling/Novadebt, both of Dallas; El Paso Community Action Program/Project BRAVO, El Paso; Credit Coalition, Fifth Ward Community Redevelopment Corporation, and Gulf Coast Community Services Association, all located in Houston; and Affordable Housing Centers of America, Consumer Credit Counseling Services of Greater San Antonio, and Our Casas Resident Council, all of San Antonio.

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