WASHINGTON, DC – U.S. Senator Bob Casey (D-PA) introduced legislation today to provide temporary mortgage relief to unemployed workers. The Homeowners’ Relief and Neighborhood Stabilization Act of 2010 will help to slow a second wave of foreclosures by providing $3 billion for loans for up to 24 months for unemployed or underemployed homeowners who are at least three months behind on their mortgage payments and have received a notice that the holder of the mortgage intends to foreclose.
“With unemployment and foreclosure rates on the rise, we must provide support to help Pennsylvanians get back on their feet and stay in their homes,” said Senator Casey. “Neighborhoods continue to suffer from housing price declines, lost property tax revenue and abandoned properties. This bill will also continue the good work of the Neighborhood Stabilization Program helping homeowners weather the current economic climate. The need far outstrips the money available.”
Pittsburgh was recently denied application for Neighborhood Stabilization funding. The U.S. Department of Housing and Urban Development (HUD) stated that $15 billion worth of applications were submitted for $2 billion in funds available.
According to RealtyTrac, foreclosures in Pennsylvania increased by 20% from 2008 to 2009 and nationally by 21% to a record 2.8 million foreclosure filings in 2009.
Modeled on the Homeowners’ Emergency Mortgage Assistance Program (HEMAP) administered by the Pennsylvania Housing Finance Agency since 1983, key provisions of the Homeowners’ Relief and Neighborhood Stabilization Act of 2010 include:
• Direct $3 billion in TARP funds to a program established at HUD called the Emergency Homeowners Relief Fund
• Allow homeowners facing a temporary loss in income due to unemployment, underemployment or medical condition to receive low-interest loans for up to 24 months to assist in their monthly mortgage payment. Homeowners must be at least 3 months behind on their mortgage payments and have received a notice stating that the holder of the mortgage intends to foreclose
• Instruct the HUD Secretary to take a homeowner’s ability to repay into account when establishing the terms, conditions and rates of the loan. Interest rates shall be fixed for the life of the loan and capped at FHA rates and prepayment penalties may not be assessed
• Provide $1 billion to the Neighborhood Stabilization Program, created in the Housing and Economic Recovery Act of 2008, to provide grants to state and local governments and eligible entities to purchase and redevelop foreclosed and abandoned homes and residential properties
Congresswoman Maxine Waters introduced similar legislation in the House of Representatives that was included in H.R. 4173, the Wall Street Reform and Consumer Protection Act of 2009 which passed the House of Representatives.
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