CHFA Foreclosure Prevention Program Could Get New Funding ...

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A foreclosure prevention program that has already provided more than 600 loans for borrowers in danger of losing their homes could be extended by state lawmakers.

The Emergency Mortgage Assistance Program, or EMAP, could be funded with up to another $60 million and be expanded to include FHA-insured mortgages, which are currently excluded. The program, administered by the Connecticut Housing Finance Authority, has currently approved nearly $30 million in loans that date back to 2008 when EMAP was put in place by the legislature.

Next week, the legislature?s banks committee will vote on whether to send the measure to the House and Senate.

?It literally has saved hundreds of people from losing their homes,? said Sen. Bob Duff, D-Norwalk, co-chair of the banks committee, told me today. ?It?s helping keep people on their feet.?

Connecticut lawmakers may extend funding for a CHFA foreclosure prevention program that makes loans to homeowners. File Photo.

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The program got off to a slow start in 2008 because of requirements that were deemed too restrictive, particularly what constitutes a ?financial hardship.? A year later, that was expanded to not include a drop in income but a sudden jump in medical and other expenses.

EMAP loans must be repaid once borrowers have regained their financial footing. The loans can either catch-up borrowers on delinquent payments or provide monthly assistance to make mortgage payments or both. Those who qualify can receive as many as 60 monthly payments. The loans are subject to yearly reviews.

Borrowers must have had good payment histories prior to their current financial troubles emerging.

More information on how to qualify for EMAP can be found here.

In 2011, the average loan was $67,100, compared with $25,850 in 2008, according to CHFA.

Duff said the program merits further funding because ?we?re not out of the woods yet, we may be getting out of the woods but we?re not there yet.?

Connecticut?s economy is showing steady improvement, with the unemployment rate dropping to 8 percent from a peak of 9.4 percent in August, 2010. But it still will be years before the state regains all the jobs it lost in the last recession.

There are also expectations that foreclosures may increase now the major banks have settled with regulators on how they deal with delinquent borrowers. While both sides negotiated the agreement, a broad cross-section of foreclosures in Connecticut and nationally were put on hold.

Recently, the picture of Connecticut homeowners in trouble was mixed. In the last three months of 2011, the overall number of residential borrowers who were behind on their monthly payments eased slightly, but those who were in the most serious trouble ? 90 or more days past due ? crept up again.

Jeff Gentes, managing attorney for foreclosure prevention at the Connecticut Fair Housing Center in Hartford, said not much has changed in the past two years since the center declared a crisis in borrowers falling behind. Back then, 1 in 17 were 90 or more days past due; now, its 1 in 13 or 1 in 14.

?Long-term unemployment is still a problem,? Gentes told me.

Extending EMAP was one of the recommendations from a task force, charged by the legislature, to review and evaluate CHFA?s housing programs.

An extension of EMAP likely would be funded by CHFA selling bonds. It is possible that the interest on those bonds could be paid for by using a portion of the funds coming to the state as a result of the $25 billion, nationwide settlement with the five largest mortgage servicers, Duff said.

Connecticut?s share is more than $190 million, with $27 going to programs that help prevent foreclosure.

Follow the progress of the bill here.

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Source: http://courantblogs.com/ct-real-estate/chfa-foreclosure-prevention-program-could-get-new-funding/

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