By Barbara Pash
In a use-it-or-lose-it arrangement, the Maryland Housing and Community Development Department has until September 30 to give out $36 million in federal emergency mortgage loans to state homeowners facing foreclosure.
“We are in ‘turbo drive’ with the aim of obligating all the funds,” said Carol Gilbert, the department’s assistant secretary for neighborhood revitalization, who is optimistic that goal can be met. Gilbert was speaking at a meeting last Friday on financial literacy.
Last year, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which provided $1 billion for the Emergency Homeowners Loan Program for qualified homeowners facing foreclosure.
The program is available to homeowners who have lost at least 15% of their income due to involuntary job loss, reduction in wages, or a medical condition, Gilbert said.
Homeowners may be able to receive loans for up to 12 months of overdue debt, including delinquent taxes and insurance, and up to 24 months going forward, with a maximum combined total of $50,000 for the zero-interest loans.
Because Maryland had a program in place that made loans to homeowners in danger of foreclosure, called Bridge to Hope, the state was able to get a total $39 million.
Of that figure, $3 million will be spent on administrative costs, leaving $36 million available for loans. As of June 10, the housing department has provided $3.4 million in loans to 99 consumers and has received 498 applications.
Processing can take four to six weeks. The loans have to be closed by September 30 in order to meet the federal deadline. The loans are available statewide with a focus on Baltimore City and Prince George’s County, the hardest hit in the mortgage meltdown, according to Jacqueline Lampell, DHCH spokesperson.
Because of the short deadline, she said, “we are working on this day and night and on weekends.”
Abby – No, the “success rate” is much higher. The 498 applications are PENDING; they have not been turned down.
So the “success” rate of this program is 20% to date? With $3 million in administrative costs? Sounds like another winning government employment program to me.