Pennsylvania Helps Unemployed Homeowners Avoid Foreclosure

foreclosure

 

In the midst of the foreclosure crisis that has swept all across America, one state has in place a program that has been helping families stay in their homes since its passage in 1983.  The state is Pennsylvania, and according to this article,  the program prevented foreclosure for 3,250 families last year. 

 

This program is called the Pennsylvania Foreclosure Prevention Act  91 of 1983. It provides loans to qualified homeowners for up to $60,000 which are secured by a lien on the property. The loan proceeds then go toward paying off the arrearage and helping the homeowner make his or her payments until the person finds work

The way the program works is simple: when a homeowner falls 60 days or more past due, the servicer is required to send a specific notice advising the homeowner of the Act 91 program.  Once the homeowner applies for the program, it can take 4 months to complete the process and during this time, all foreclosure activity stops.  Since this program is part of the foreclosure process in Pennsylvania, every homeowner can elect to at least be evaluated for assistance before any further foreclosure measures are taken.

Because the nature of the assistance is a loan rather than a grant, in order to qualify,  homeowners need to prove that they can resume making their mortgage payments in full within 36 months. Usually, this means they must have employable skills/employment history or plans to get retraining or education to enter a new field. 

The program touts an 80% success rate in foreclosure prevention and because of this some states hard hit by the foreclosure crisis, such as California, Nevada, and Florida are looking at implementing a similar program. 

With the foreclosure crisis continuing unabated even a year after President Obama enacted HAMP, it is clear something more needs to be done. Pennsylvania’s Act 91 program is a good starting point to look for additional solutions.

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One Response to “Pennsylvania Helps Unemployed Homeowners Avoid Foreclosure”

  1. […] one measure has been hammered out: a plan styled after the Pennsylvania HEMAP program, which I wrote about earlier, to combat mortgage foreclosures,  has been approved by both the House and […]

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