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For Immediate Release
5/9/08
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Senators Unveil Foreclosure Relief and
Affordable Housing Initiative
Plan boosts emergency mortgage assistance, provides grants and loans,
creates housing trust fund.
HARRISBURG – Legislation that would increase emergency mortgage assistance, provide grants and loans to
homeowners facing foreclosure, and create a housing trust fund was
announced by two Republican senators today.
Senator James Rhoades (R-29) and Senator John Pippy (R-37) unveiled the Foreclosure Relief and Affordable
Housing Initiative, which could be considered by the Senate's Urban
Affairs and Housing Committee as soon as next week.
There were nearly 6,000 foreclosure filings in Pennsylvania in the first quarter of 2008, up 7.6 percent
from the previous quarter. This package represents a $32 million effort
to provide immediate assistance to families in danger of losing their
homes, and to implement long-term initiatives to mitigate future
downturns and expand the availability of affordable housing.
"Although Pennsylvania is doing better than some other states in terms of foreclosures," said Sen.
Rhoades, "we should take steps to help families get out of bad,
adjustable-rate mortgage products and into fixed-rate mortgages that
they can afford."
"Generally speaking, we have done a good job in Pennsylvania of addressing housing needs," said Sen. Pippy,
chairman of the Urban Affairs and Housing Committee. "But many
worthwhile projects go unfunded each year because of the limited
resources available to the Pennsylvania Housing Finance Agency. Creating
a Housing Trust Fund will give them additional tools to help meet our needs."
The Foreclosure Relief and Affordable Housing Initiative includes four components:
- Refinancing Assistance Grants – This program would assist low-income homeowners who have mortgage terms that
have become or are in the process of becoming unaffordable due at least
in part to the current or readjusting interest rate. Qualified
applicants would be eligible for a one-time grant of up to $2,500 to
cover closing costs associated with refinancing. This program will not
cover any mortgage payments; existing loan programs are available for
that purpose. $10 million will be appropriated to PHFA for this
program.
- PA Housing Affordability and Rehabilitation Enhancement Act (PHARE
– The Pennsylvania Housing Finance Agency (PHFA) has done a tremendous
job in addressing housing and community development needs throughout the
Commonwealth, yet nearly two-thirds of worthy projects presented to PHFA
go unfunded due to a lack of resources. PHARE would allow PHFA to
develop or expand affordable housing programs to build, rehabilitate and
preserve homes for low to moderate income individuals and families, the
elderly and people with disabilities. $10 million will be appropriated
to create the PHFA Housing Trust Fund.
- Expanding Homeowner Equity Recovery and Refinancing Loan Programs
– This program will boost the number of loans available through two
successful PHFA programs, the Homeowner Equity Recovery Opportunity Loan
Program (HERO) and the Refinance to an Affordable Loan Program (REAL).
HERO loans assist homeowners who have sub-prime or predatory loans, and
in some instances owe more than the current value of their homes. REAL
is targeted at homeowners who are 60 days or less delinquent on mortgage
loans that have adjusted to an unaffordable rate or will be adjusting in
the future. $10 million will be provided to PHFA which, through the use
of bond financing, will increase the amount of available loans by $50
million to $75 million.
- Homeowners Emergency Mortgage Assistance Program (HEMAP)
– Senators Rhoades and Pippy also are seeking a $2 million increase in
funding for HEMAP in FY 2008-09 (from $11 million to $13 million). HEMAP
provides loans to protect Pennsylvanians who are financially unable to
make their mortgage payments and are in danger of losing their homes to
foreclosure.
In Pennsylvania, 5,901 foreclosures were filed in the first quarter of 2008, according to RealtyTrac, which
publishes a database of foreclosure and bank-owned properties.
Nationally, first-quarter foreclosure filings – default notices, auction sale
notices and bank repossessions – showed a 23 percent increase from the previous
quarter and a 112 percent increase from the first quarter of 2007. The
RealtyTrac report also shows that one in every 194 households in the United
States received a foreclosure filing during the quarter.
CONTACTS:
Greg Mahon (Office of Sen. Pippy), (717) 787-5839,
gmahon@pasen.gov
David Broderic (Office of Sen. Rhoades), (717) 787-2637,
dbroderic@pasen.gov
Bill Summaries
May 16, 2008 - Featured in Senate News Brief
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