Federal program set $61m for Mass.
A much-delayed federal program designed to help unemployed homeowners in Massachusetts and elsewhere pay their mortgages probably won’t be up and running until later this spring, if at all.
The Emergency Homeowners Loan Program, which has come under attack from Republicans in Washington, is supposed to provide $1 billion in loans to struggling homeowners in 32 states and Puerto Rico who have lost their jobs or experienced a dramatic drop in income. Several thousand Massachusetts homeowners are scheduled to receive as much as $50,000 apiece in the bridge loans, or about $61 million statewide.
The program was approved by Congress last summer and was expected to be functioning by the end of 2010. But complications have repeatedly stalled the start date. Now federal housing officials say the last target date — right about now — will not be met. They said local homeowners should hear more details about how to apply for a loan “later this spring.’’
Adding to the program’s obstacles, the US House of Representatives last week approved a bill to eliminate the program as part of an effort to reduce federal spending. The legislation is now in the Senate, but White House officials already have said they would recommend that President Obama veto it, on the basis that the program could help as many as 30,000 people make their mortgage payments.
In a statement, the Obama administration said it is “committed to helping struggling American homeowners stay in their homes.’’
Brian Sullivan, a spokesman for the Department of Housing and Urban Development, which is charged with administering the program, said it will move forward with planning unless instructed by Congress to stop. The agency published details about the loan program in the Federal Register earlier this month.
The delays and debate are causing concern among housing advocates who have long argued that the country’s growing foreclosure crisis is largely exacerbated by unemployment, rather than predatory lending and subprime loans. Boston activist Lewis Finfer said this week that he worries the Senate may agree to eliminate the program as part of a budget compromise. Finfer said he also is frustrated about the delays, which have left tens of thousands of homeowners around the country anxiously waiting for news about how to apply.
“Lots of people have called about this,’’ said Finfer, executive director of the Massachusetts Communities Action Network, a Boston nonprofit group. “They are hanging on precariously.’’
Already, federal housing officials expect the program will be oversubscribed — with far more homeowners seeking loans than there is money to dole out — and plan to use a lottery to determine who will be able to submit final applications.
Last year in Massachusetts, nearly 24,000 homeowners went into foreclosure, putting them at risk of losing their homes.
The housing fund, approved as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is intended to supplement a $7.6 billion campaign launched by the Treasury Department to help troubled homeowners in 18 states and the District of Columbia — all of which were hit harder by the recession than the nation as a whole.
Eligible homeowners may qualify for up to 24 months of financial assistance, including a zero-interest loan that can be forgiven over time.
Borrowers who remain in their homes and stay current on mortgage payments for five years will have their loan balance reduced by 20 percent annually until it is eliminated, according to HUD. Homeowners must be at least three months’ delinquent on mortgage payments to qualify.
The Massachusetts portion of program will be administered by the Washington, D.C.-based NeighborWorks America, a nonprofit network of community development and affordable housing groups. Spokesman Douglas Robinson said the group is “ready to move ahead’’ when federal guidelines are finalized. “We know nonprofit organizations have clients who could really use this,’’ he said.
Jenifer B. McKim Boston Globe March 19, 2011
No comments:
Post a Comment