Yorkers who are in danger of losing their homes have been given one more tool to stave off foreclosure.
Pennsylvania has delegated its $66.5 million share of a $25 billion "robo-signing" settlement with the nation's five largest mortgage loan servicers to assist homeowners with foreclosure and other housing issues through the Homeowners' Emergency Mortgage Assistance Program, or HEMAP.
That program and others like it were cut last year for lack of funding despite a steady flow of foreclosures in York and statewide, tying the hands of agencies tasked with helping troubled homeowners.
The program is one of the most popular at Y Housing Resources, formerly the Housing Alliance of York, said housing counseling supervisor Christy Neuman.
The nonprofit had to stop offering the program in June 2011 because of the funding shortage, even though about half of the 400 people the agency saw that year showed up to apply for it, Neuman said.
She accepted her first application for this round of assistance on Thursday, three days after the state officially reopened the program, she said.
How it works: Under the program, homeowners who are at least three months behind can get a second mortgage loan through the Pennsylvania Housing Finance Agency to bring their first mortgages current so they can resume making payments.
The homeowner must be in arrears because of circumstances beyond his or her control, such as loss of employment or illness, and must be able to resume normal payments after the past-due amount is addressed.
"People fall into circumstances where they can't get caught up, but could if they didn't have that back balance," she said.
She said she expects to field a lot of applications for the popular program, mostly from homeowners who haven't been able to recover from "old" circumstances they were dealing with during the recession.
Homeowners can apply for a loan, to be repaid later, for as much as $60,000 to catch up on back payments. The loans are only good for conventional mortgages, not those purchased through the Federal Housing Administration.
What's next? Starting Oct. 2, loan companies must send notice to homeowners who are three months delinquent and give them a 30-day window to delay foreclosure so they can apply for the program. After they apply, foreclosure is staved off for another 30 days.
The state decided to use the funding for foreclosure services because the settlement was won as a result of the "robo-signing" scandal in which homeowners had not been treated legally during foreclosure, said Kelli Roberts, spokeswoman for Gov. Tom Corbett.
"There are still homeowners challenged by the economy and struggling to keep up," she said. "It's still happening every day."
For more information about the Homeowners' Emergency Mortgage Assistance Program, call 1-800-342-2397 or visit www.phfa.org/counseling/hemap.aspx.
- Reach Christina Kauffman at firstname.lastname@example.org.