Since the beginning of the pandemic, policymakers that govern the collection of mortgage payments, whether they were from the Federal Housing Finance Administration, which governs Fannie Mae and Freddie Mac loans, the Veterans Administration for VA loans, the Federal Housing Administration for FHA-insured loans or Department of Agriculture with USDA loans have issued moratoriums on all mortgage foreclosures for their loans. Homeowners have been able to apply for a mortgage forbearance of up to 12 months to prevent the collection of payments and negative activity on the borrower’s credit profile. Even various national lenders allowed for mortgage forbearances on their portfolio mortgage loans for struggling homeowners.

A few weeks from now will mark the anniversary of when former President Trump declared the COVID-19 pandemic a national emergency. Around that same time, the first borrowers will have to pay back the missed mortgage payments, which did not require collection because they were in forbearance. Unfortunately, for many Pennsylvanians, economic conditions have not improved to enable them to resume making payments. Also, conventional mortgages that are not backed by the government do not have specific requirements to modify the borrower’s delinquent mortgage.

This is where the Homeowners Emergency Mortgage Assistance Program (HEMAP), managed through the Pennsylvania Housing Finance Agency (PHFA), can serve as a lifeline for many struggling Pennsylvania homeowners. Passed in 1983 due to the closure of many steel mills in Western Pennsylvania, HEMAP provides emergency loan support for households that are delinquent with their mortgage for circumstances beyond their control and that show a willingness and/or capacity to resume making regular mortgage payments.

If a homeowner is approved for the HEMAP program, PHFA will reinstate the borrower’s mortgage for up to 36 months of missed payments. When regular payments can resume, PHFA will require that the borrower starts paying their mortgage and the HEMAP loan. Monthly payments for HEMAP are as little as $25 per month, based on a housing expense to income ratio.

Since the inception of HEMAP, over 50,000 Pennsylvania families have been helped by this program avoid foreclosure. For all the payments that have been disbursed to these families, PHFA has recovered $328 million through loan repayments. This a great program, which does not put a significant burden on Pennsylvania taxpayers.

In this time of economic peril all of us can anticipate a tsunami of foreclosures, which will ravage Pennsylvania communities, large and small. For this reason, HEMAP must be prepared to meet the challenge. Regrettably, it’s not. The HEMAP program currently has approximately $10 million available to support households seeking mortgage relief. This may be enough to support 1,000 applicants; meanwhile there are over 1 million Pennsylvanians that are delinquent with their mortgage. This is a gross imbalance, which will force PHFA worthy applicants because the agency has insufficient funds.

To ensure this program is fair and effective, additional funds provided from the Pennsylvania budget is necessary. PHFA made the request to the governor’s office for an appropriation of $50 million for the HEMAP program. This appropriation will go to immediate use to prevent many mortgage foreclosures.

It was only a decade ago that we lived through the collapse of the financial system and the Great Recession resulting in thousands of foreclosures. States and communities that were proactive were able to stem the tide of foreclosures and quickly recover. A similar call to action for our state government to appropriate additional funding for HEMAP is needed.

Kenneth Bigos is Executive Director, Affordable Housing Centers of Pennsylvania, Philadelphia.



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