An estimated 5.5 million homeowners facing imminent foreclosure are one signature away from assistance thanks to legislation approved in both the Senate and House of Representatives. The plan is modeled after the successful Pennsylvania program Rep. Chaka Fattah (D-PA) introduced and steered into law in 1983, the Homeowners' Emergency Mortgage Assistance Program (HEMAP) as a state representative in the Pennsylvania legislature. Since HEMAP's inception in Pennsylvania, more than 43,000 owners have avoided losing their homes.
The nationwide program, Homeowners' Emergency Mortgage Assistance (HEMA), would acquire $3 billion from the unused Troubled Asset Relief Program (TARP) to make mortgage avoidance funds available for unemployed homeowners and those suffering financial distress. The legislation calls for lenders to inform a homeowner in mortgage default, about the HEMA program before the foreclosure process can begin.
If eligible, a homeowner makes a fractional payment to the U.S. Department of Housing & Urban Development (HUD) instead of the lender. Provided the homeowner has a reasonable probability of resuming mortgage payments, HUD will assume full payment to the lender. Once the homeowner's immediate financial problems are resolved, they reassume full responsibility for the mortgage and pay back the HUD for the temporary loan.
On behalf of the millions able to take advantage of the program and stay in their homes, Congressman Fattah thanked his colleagues for their support in ensuring his legislation, first introduced in the house seven years ago, was included in the Wall Street Financial Reform and Consumer Act.
"Under the leadership of Barney Frank (D-MA), Chairman of the Committee on Financial Services, who incorporated the language in the bill and Congresswoman Maxine Waters (D-CA), Chair of the Housing Subcommittee, who helped steer the bill through committee, millions of owners will be relieved of the stress of simultaneously securing a job and securing their home," said Rep. Fattah.
For more information, visit fattah.house.gov.