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Another Take on Solving the Foreclosure Crisis: Loans to Jobless Homeowners [View All]

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Iwillnevergiveup Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Oct-12-09 11:21 PM
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Another Take on Solving the Foreclosure Crisis: Loans to Jobless Homeowners
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10/12/09 by John Dodds


Many servicers won't offer loan modifications to the jobless.

Bankruptcy reform has been the preferred solution of many housing advocates and Democrats, but the banking lobby killed the legislation in the Senate and it is highly unlikely that it can be resurrected at this time.

However, there is a logical solution that has yet to be tried. That is to provide loans directly to unemployed homeowners to pay their mortgages until they get back to work. The state of Pennsylvania has a program enacted in the severe recession of 1983 that does just that. The Homeowners Emergency Mortgage Assistance Program (HEMAP) has provided loans to over 43,000 homeowners since 1984 at a cost to the state of $236 million. Assisted homeowners have repaid $246 million to date, which works out to a $10 million profit for the state after 25 years of helping families keep their houses. To be eligible for HEMAP, homeowners must be in default through no fault of their own and have a reasonable prospect of resuming their mortgage payments within 36 months. Repayment is a token $25 per month until the family has sufficient income to pay their existing mortgage and begin to reimburse the state.


This seems like a real remedy - any PA DUers familiar with it?
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