Financial Help To Stop Foreclosure

Foreclosure Relief Effort Finally Kicks Off

The Obama administration is finally launching a long-awaited $1 billion program designed to provide the unemployed with loans to help them avoid foreclosure.

But there’s a catch: Homeowners will have only a month to apply.

The new Emergency Homeowners’ Loan Program, created in the Dodd-Frank financial overhaul last year, aims to help unemployed homeowners with their mortgage payments by providing zero-interest loans of up to $50,000. The program is expected to aid 30,000 borrowers, and the loans can be forgiven over five years.

On Monday, the Department of Housing and Urban Development said it approved 27 states and Puerto Rico for the program. That adds to five states that already had similar programs in place and were approved for funding in April. Texas is the largest recipient of the government funding, at $135 million, followed by New York at $112 million. Homeowners will need to apply by July 22 to be eligible for the program.

Borrowers must be approved by Sept. 30. At that point, the government’s authority to make new loans runs out. The administration had aimed to launch the program at the end of last year but was delayed due to complications in hashing out agreements with state agencies, a nonprofit counseling network NeighborWorks USA and a financial processing firm that are helping to run the program.

The delays have been a source of concern for housing counselors, who worry that not all of the money will be spent. “It will be challenging,” to enroll borrowers, given the short time frame, said David Berenbaum, chief program officer of the Washington-based National Community Reinvestment Coalition, which is helping to run the program. “It’s been extremely frustrating that the program has been so delayed.”

The program was inserted into the Dodd-Frank bill by Democrats who modeled the program after one created in Pennsylvania in the 1980s to assist unemployed steel and coal workers. It has won plaudits for being more effective than other foreclosure-prevention programs.

Meanwhile, Republicans in the House of Representatives have tried to kill the program, but have had no luck so far. The assistance program doesn’t include Michigan, California, Nevada and some other states, which are setting up similar assistance efforts but are receiving funding through a different source — a Treasury Department effort directing $7.6 billion in assistance to states that have been hit hard by the housing bust.

Indianapolis Bankruptcy Attorney Working to Help Stop Foreclosure ...

Quite often, individuals or couples contemplating filing personal bankruptcy in Indiana also need help to stop foreclosure on their homes.

As an Indianapolis bankruptcy lawyer working hard to negotiating mortgage modifications , often encountering nothing but frustration with the inefficiencies of the system, I was particularly happy to read in the Indianapolis Star readers up to date on foreclosure alternatives and on all the government initiatives that were passed to help homeowners avoid foreclosure. While bills keep being debated in Congress that would allow bankruptcy judges to modify loans, none has so far passed.  The attorneys who are my colleagues in Indianapolis, Anderson and Bloomington, and the bankruptcy lawyers in Columbus who work with me have all been dealing with both homeowners and their mortgage servicing companies.