Home Protection Program and Loan Fund
The North Carolina Home Protection Program and Loan Fund helps workers who lose their jobs as the result of changing economic conditions avoid foreclosure of their homes. Created by the General Assembly in 2004 and operated by the North Carolina Housing Finance Agency.
If you qualify, you can receive a zero-interest loan that is usually equal to the lesser of $24,000, 24 months of monthly mortgage payments, or the minimum amount required to bring loans and other mortgage-related obligations current. The loans can be either short-term—to bring a mortgage current, or long-term—to keep a mortgage current for up to 24 months while you participate in an approved retraining program.
A unique component of the program is a temporary 120-day stay of foreclosure. Under N.C. statute (Session Law 2005-276, Section 20.2, as amended), once a homeowner’s completed application has been received by the Agency, the stay of foreclosure is imposed. While the stay protects you from foreclosure, it does not protect against collection, prevent late payments from being included on your credit report, or relieve you from honoring any agreements to pay mortgage-related obligations.
Homeowners apply through participating local agencies, which offer housing counseling and determine whether applicants are eligible for assistance from the loan fund. Homeowners must provide all necessary information with the application, including the circumstances that caused the financial hardship and the factors affecting prospects for resuming mortgage payments. Please note that the counseling agency’s determination of eligibility for a loan does not guarantee assistance; the North Carolina Housing Finance Agency approves or denies all loans.
To be eligible for a loan, you must meet all of the following criteria:
- have lost your job due to changing economic conditions
- have a mortgage that is secured by real property
- demonstrate an ability to resume your mortgage payment after the assistance ends, and
- have had a stable employment and credit history prior to losing your job.
Assistance is available on a first-come, first-serve basis, and until funds are expended. Homeowners who need assistance should be directed to the Home Protection Program Counseling Agency in their area.
State Home Foreclosure Prevention Project
The State Home Foreclosure Prevention Project (SHFPP) was created by recent emergency legislation signed into law by Governor Easley on August 17, 2008. The SHFPP is a partnership, led by the Commissioner of Banks, to reduce subprime foreclosures in North Carolina. The partners include housing counselors, legal assistance organizations, mortgage servicers and community organizations.
A homeowner facing foreclosure on a subprime loan made between January 1, 2005 and December 31, 2007 should receive a letter from their mortgage servicer 45 days prior to foreclosure with information on resources available to assist the homeowner in avoiding foreclosure.
By providing quality legal representation in foreclosure actions, the Project saves homes, preserves credit ratings and strives to make prohibitive the cost of conducting business for the unscrupulous brokers and lenders.
The Mortgage Foreclosure Project includes a “team” of attorneys and staff who are located in LANC offices and who specialize in foreclosure defense and predatory lending law. The MFP team acts on referrals from Legal Aid of North Carolina offices and community organizations throughout North Carolina.
Legal Aid of North Carolina: 866-219-LANC (866-219-5262)
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