Thursday, March 20, 2008

Homeowner's Emergency Mortgage Assistance Program

HEMAP Can Help Avoid Foreclosure

Statistics outlining the depth of the home foreclosure crisis in this country are startling.

Nationally, more than 2.2 million foreclosure filings - default notices, auction sale notices, and bank repossessions - were reported in 2007, up 75 percent from 2006, according to RealtyTrac, a California-based private company that compiles nationwide real estate statistics.

Furthermore, more than 1 percent of all U.S. households were in some stage of foreclosure during the year, up from .58 percent in 2006.

For homeowners in Pennsylvania facing foreclosure, though, there is a program that may help.


The Homeowner's Emergency Mortgage Assistance Program (HEMAP) was created in 1983 by Pennsylvania Act 91. The program, administered by the Pennsylvania Housing Finance Agency (PHFA), is designed to help homeowners avoid foreclosure by providing a loan to cure their debt.

Permanent residents of Pennsylvania who live in a one or two - family home (not a place of business) may be eligible for the program. The mortgage cannot be insured under the Federal Housing Act (Title II), and the default cannot be more than 24 months old, or more than $60,000 in total. Also, there cannot be more than one mortgage on the home.

In addition to above requirements, applicants must have a 5-year favorable mortgage credit history (this is the first time in default), and show that they suffered a financial hardship beyond their control, such as unemployment when a company downsized its operations.

Applicants who show they have a reasonable chance of resuming regular mortgage payments within a period of 24 months can be considered for the program.

Remember, however, HEMAP is not a grant. These funds are a loan and must be repaid. PHFA will create a repayment plan that is appropriate to the home-owner's situation.

Act 91 Notice

Under Pennsylvania Act 91, a financial institution must give notice to a homeowner that the mortgage is in default, and that the lender intends to foreclose on the property.

The Act 91 notice will be mailed to a homeowner by first class and registered or certified mail. Homeowners must arrange and attend a meeting with an approved credit counseling agency (listed in the notice) within 30 days of the postmark on the notice. The credit counseling agency will determine if the homeowner can apply for HEMAP.

Act 91 Means "Act Now"

If you receive an Act 91 notice, you must take immediate action to try a save your home from foreclosure. It is always good advice to call the lending institution right away to see if they can help with the problem, such as refinancing your home with a lower interest rate that you can afford.

In addition to calling the local credit counseling agency to see if HEMAP can help, you may also need legal advice from a lawyer.

NWLS May Help

Low-income homeowners who receive an Act 91 notice may qualify for free legal aid from Northwestern Legal Services. A staff attorney can help you understand the options available to you, as well as provide representation and counsel for the civil legal problems you face.

If you get an Act 91 notice, give NWLS a call in Erie at 452-6957, or outside of Erie (toll free) at 1-800-452-6957. An intake screener will talk with you to see if your are eligible for free legal aid.