A federal program designed to help those facing foreclosure could be a savior for more than 1,200 homeowners.
The Emergency Homeowners’ Loan Program (EHLP), announced over a year ago, has just begun accepting applications. The program will provide eligible homeowners – who have lost income because of job loss, health problems or other related factors – with emergency assistance that pays a portion of their monthly mortgage payment for up to two years or a maximum of $50,000. Of the $1 billion federal EHLP pool, $61 million has been allocated to Massachusetts. That’s enough to fund a minimum of 1,220 loans to the maximum limit in the Bay State, or more if loans average less than the $50,000 max.
Chrystal Kornegay, president and CEO of Urban Edge, a Roxbury-based community development corporation, she said expects several hundred applicants in her service area to seek help through the program.
Several local community development corporations are working with HUD and Neighborworks to administer the program in Massachusetts, including Urban Edge, Nuestra Comunidad of Roxbury, Springfield Neighborhood Housing Services, Twin Cities Community Development Corp. in Fitchburg and Oak Hill CDC in Worcester.
HUD has put a pre-screening process in place for the loans, and applicants who think they may be eligible are required to submit forms by July 22. If the number of applicants looks set to exceed demand, HUD will institute a lottery for the right to apply for the program.
Kornegay said her group’s current foreclosure prevention work has shown there is a large population of potentially eligible homeowners in the areas they serve, but it would take a fresh round of publicity about the program to truly determine the demand.
"We do need to get the word out there, but we expect that once we do, there’s going to be a line outside the door," she said.
Urban Edge’s program officers are in the midst of training with HUD to administer the program, Kornegay said, and the group was still working on its rollout plans, but she said, they plan to conduct a number of clinics at its Roxbury offices.
As the housing downturn has progressed, more people are facing foreclosure not because of sub-prime loans but because they’ve lost their jobs. Servicers have been extremely reluctant to consider modifications for these homeowners.
"We still have a lot of trouble getting banks to answer the phone, getting servicers to make modifications [even when people are eligible], surprisingly enough," said Kornegay. "But one thing about going after a loan mod – if you don’t have any income, you don’t have any income."
The new program will allow homeowners a bit of breathing room to pursue a loan modification or get back in good standing with their original loan, she said.
