Holland USA, Inc.

Wednesday, December 9, 2009

Fattah's Emergency Mortgage Assistance Plan for the Jobless Moves Close to House Passage

/PRNewswire/ -- A $3 billion emergency mortgage assistance program for unemployed homeowners -- authored by Congressman Chaka Fattah (D-PA) and based on a successful Pennsylvania program that Fattah helped create as a young state legislator -- is on the verge of passage in the House of Representatives.

"There's broad agreement that a major threat to homeowners today is loss of their homes because of unemployment and job distress through no fault of their own," Fattah said. "Our program is a game changer, especially for struggling homeowners in our cities and rural areas and for minorities. It will provide $3 billion in TARP funds for mortgage payments that will keep these families in their homes.

"This has been a six year effort in the House since I first introduced mortgage assistance of the unemployed in 2003, and now we're on the verge of success," Fattah said. "The Obama Administration supports this effort, and I look forward to passage in the Senate followed by the President's signature in the near future."

In Pennsylvania, unemployed and financially distressed homeowners have received $236 million in emergency mortgage assistance since 1983, when the Homeowners' Emergency Mortgage Assistance Program (HEMAP) was enacted by the Legislature. (Most of those loans have been repaid.) Fattah, as a 26-year-old freshman state representative, took the lead in designing and winning approval for the HEMAP program.

"HEMAP has been a big winner for homeowners in Pennsylvania, especially in our most impoverished urban and rural areas," Fattah said. "The program has drawn praise from housing and mortgage advocates in Philadelphia and elsewhere, and now it becomes the model for this much needed national scale-up."

Fattah's HEMA proposal was incorporated into H.R. 3766, the Main Street TARP Act, introduced by Chairman Barney Frank (D-Mass) of the Financial Services Committee, with Subcommittee Chairwoman Maxine Waters (D-CA) and Rep. Fattah as original cosponsors.

H.R. 3766 proposes to use unspent TARP (Troubled Asset Relief Program) funds to provide relief for distressed homeowners who are unable to meet their mortgage obligations due to financial hardship, as well as providing assistance to renters seeking affordable housing. The mortgage assistance provisions have been included in the Wall Street Reform and Consumer Protection Act of 2009 (H.R. 4173).

Chairman Frank, sponsor of the overall Wall Street Reform bill, and Subcommittee Chairwoman Waters, have praised the Philadelphia Congressman's initiative on mortgage relief. Frank will include the Main Street TARP Act's key provisions into what's called the Manager's Amendment to the Wall Street Reform bill, which is scheduled for final action in the House this week.

Under Fattah's HEMA proposal, a lender must inform a homeowner in mortgage default about the HEMA program before the lender can begin foreclosure proceedings.

A homeowner found eligible to participate in the program then makes a partial mortgage payment to the U.S. Department of Housing and Urban Development instead of the lender. HUD subsequently pays the homeowner's entire monthly mortgage to the lender provided that the homeowner has a reasonable prospect of resuming mortgage payments within 24 months.

-----
www.fayettefrontpage.com
Fayette Front Page
www.georgiafrontpage.com
Georgia Front Page

No comments: