Homeowners who are at risk of foreclosure can expect to see some help this summer — both from the government and from grassroots advocates.
This month, the Pennsylvania Housing Finance Agency (PHFA) will roll out a loan program that aims to help those who are likely to fall behind on house payments because they’re locked into mortgages whose rates are soaring, such as adjustable-rate mortgages (ARM). An ARM is a mortgage where the interest rate is periodically adjusted based on current rates.
“We’re targeting people who have managed to keep their head above water, just barely, but may not have enough equity to do a refinance,” says Kate Newton, PHFA’s director of home-mortgage programs. “This will help people who are absolutely trapped in their current [mortgage]. They truly are stuck.”
In 2006, Allegheny County saw 4,727 foreclosures. So far this year the number of foreclosures already is estimated to inch up by 3 percent, to 3,142 by this August, compared to 3,042 in August 2006.
The new loan program, called Refinance to an Affordable Home, will refinance up to 100 percent of the current appraised value of the property, including prepayment penalties, and accept applicants who have no more than two late payments within the last two years.
Newton says many local lenders, such as Allegheny Mortgages, Dollar Bank, SkyBank, Iron & Glass Bank and West Penn Financial, have agreed to originate the refinancing loans.
Meanwhile, however, many homeowners are facing foreclosure because they never got the help they needed. The Allegheny County Sheriff’s Office launched a hotline on June 25 that would provide information to callers before their houses are listed for sheriff’s sale. Staff fielding the calls will refer homeowners to legal or other help, but cannot offer legal advice.
Also, county sheriff William Mullen recently has agreed to share a list of homes to be auctioned off with Association of Communities Organized for Reform Now (ACORN) two months in advance.
“It will make a difference,” says Mary Ellen Hayden, head organizer of the Western Pennsylvania branch of ACORN. “Now we have the time, we’re able to seek people out and try to help them.” ACORN members have already started to contact those whose homes are listed for the sheriff’s sale in August.
“People look at us as those who come to take their homes, and that that’s all we’re there for. We did all the dirty work,” says Mullen. With the hotline, “what we’re trying to do is get ahead of the curve … to educate and point people in the right direction.”
But Ed Kress, an estate and bankruptcy attorney vying for Mullen’s seat in the November general election, is crying foul. Kress entered the race in March solely on a platform of revamping the way sheriff’s sales are conducted.
Setting up a hotline “was my idea,” says Kress. As sheriff, Kress says he would also collaborate with the district attorney, state attorney general as well as other civil attorneys to target “predatory lenders” who made the bulk of the home loans that go sour.
The Allegheny County Sheriff’s Office Mortgage Foreclosure Hotline is 412-350-4704. Hours are Monday through Friday, 9-11 a.m. and 1-3 pm.