Foreclosure Mitigation Counseling Initiative
The Pennsylvania Housing Finance Agency (PHFA) has established the Foreclosure Mitigation Counseling Initiative to help interested homeowners to avoid foreclosure.
Mortgage foreclosure mitigation assistance will be made available to homeowners of owner–occupied homes with mortgages in foreclosure or in danger of default. Homeowners will be provided with such assistance that will consist of activities that are likely to prevent foreclosures and result in the “long-term affordability” of the mortgage.
The counseling sessions associated with this initiative are free services to the homeowner. Counseling and advice of all likely restructuring and refinancing strategies or the approval of a workout strategy by all interested parties is required.
Refinance to an Affordable Loan Program (REAL)
The REAL program offers attractive 30-year fixed rates. Because it combines 100 percent financing with flexible credit underwriting, it may offer relief to homeowners like you who otherwise may not qualify for typical mortgage refinance programs.
You might be eligible for a REAL loan if:
- The combined gross annual income of all borrowers may not exceed $120,000.
- You are no more than 59 days past due on your existing mortgage.
- You must have a credit score of at least 620 OR meet all of the following conditions:
- Your mortgage payment adjusted in the last 12 months to a higher interest rate or a fully amortized payment and you have made no more than two, 30-day late payments since the adjustment.
- Your credit history of other debt shows no more than three, 30-day late payments 12 months
- You may borrow up to 100 percent of your home’s value based upon a current appraisal.
- Your monthly total debt costs may not be more than 50 percent of your total gross monthly income.
If you meet the conditions above, contact a PHFA-participating REAL lender. You may also call PHFA’s toll-free consumer information hotline at 1.800.822.1174 for more details.
PHFA also offers free mortgage counseling through its network of Foreclosure Mitigation Counseling Initiative (FMCI) Agencies. These agencies can review your specific situation and help you sort through your options. They can also help you gather the information and documents required for the HERO Program which is described below.
Homeowners’ Equity Recovery Opportunity Loan Program (HERO)
HERO is a loan program designed to improve the financial situation of Pennsylvanians who are not able to afford their current mortgage payments and may face foreclosure. The HERO program provides for up to 100 percent financing but, instead of refinancing your current mortgage into a new loan, PHFA purchases your loan directly from your current lender and then sets you up on an affordable repayment agreement. This program is for borrowers not eligible for PHFA’s REAL program (Refinance to an Affordable Loan) or another mortgage refinance product available in the general market due to credit issues or owing more than your home’s current appraised value.
- HERO provides an affordable interest rate.
- PHFA services the loan so you don’t have to worry about it being sold to another lender or servicer.
- Property taxes and insurance are included in your monthly payment amount.
- If you owe more than your home’s current value, PHFA may be able to negotiate with your current lender to reduce the amount owed on your loan.
- The HERO loan may be used to pay off: the current mortgage debt, closing costs, prepayment penalties, and delinquent property taxes.
- All approved borrowers must attend in-person financial counseling at a PHFA-approved agency.
You might be eligible for a HERO loan if:
- The combined gross annual income of all borrowers may not exceed $120,000
- You have made an effort to meet your financial obligations to the best of your ability.
- You have sufficient and stable income to support timely repayment of the HERO loan in regular, monthly installments
- You own the mortgaged property and reside in it as your permanent residence
- If you have stopped making your mortgage payments, you can account for your cash flow by showing how you have escrowed, saved, or redirected those funds.
- The HERO loan must be in first lien position.
If you meet the conditions above, contact the HERO Loan Program Specialist at 1.800.822.1174. The Loan Program Specialist will further explore whether HERO may be your answer. This may include sending you a HERO Prequalification Form and requesting additional documentation relevant to your income, debts, and mortgage terms.
Emergency Mortgage Assistance Program
Thousands of Pennsylvania families faced with the possible loss of their homes through foreclosure have received help from the Homeowners’ Emergency Mortgage Assistance Program (HEMAP). This unique program, created by Act 91 of 1983, is the only one of its kind in the nation.
HEMAP is a loan program designed to protect Pennsylvanians who are financially unable to make their mortgage payments and are in danger of foreclosure. HEMAP funds loaned to prevent foreclosure are not a grant. These funds are a loan and must be repaid.
When approved for HEMAP assistance, a loan is created to bring the delinquent payments current. Two types of assistance are available to the homeowner depending on their income and financial situation: continuing mortgage assistance loans and non–continuing mortgage assistance loans.
If a homeowner qualifies for a non–continuing mortgage assistance loan, their mortgage is brought current to a specified date and the homeowner is responsible for making all subsequent monthly mortgage payments to their lender along with a monthly payment to HEMAP. The homeowner may also be required to make a cash contribution toward the mortgage delinquency at the time the HEMAP loan closes.
If a homeowner qualifies for a continuing mortgage assistance loan, their mortgage is brought current to a specified date and then HEMAP subsidizes their monthly mortgage payment to their lender.
All HEMAP loans, continuing or non–continuing, are limited to a maximum of 24 months from the date of the mortgage delinquency, or to a maximum of $60,000.00, whichever comes first.
HEMAP loan recipients are required to pay up to 40 percent of their net monthly income, as determined by HEMAP, towards their total housing expense. The minimum monthly payment/contribution to HEMAP, set by law, is $25.00 per month per mortgage assisted.
If the homeowner qualifies for a continuing mortgage assistance loan, the homeowner sends their designated monthly payment/contribution amount to HEMAP. HEMAP combines the amount sent by the homeowner with HEMAP funds and forwards the full monthly mortgage payment directly to the lender on the homeowner’s behalf. Homeowner’s contributions are set at 40 percent of the household net monthly income (NMI) less the utility expense and homeowners insurance costs, if it is not escrowed.
The interest rate on mortgage assistance loans is nine percent when household income requires repayment based on the 40 percent calculation. If income does not require repayment based on the 40 percent calculation, interest will not be charged and will be adjusted back and forth to nine percent as necessary. There is a mandatory minimum payment of $25.00 per month per mortgage assisted.
Related posts:
- New Jersey Foreclosure Assistance
- Ohio Foreclosure Assistance
- Georgia Foreclosure Assistance
- North Carolina Foreclosure Assistance
- Texas Foreclosure Assistance
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