HUD to Launch Emergency Loan Program for Nation's Unemployed.

Oct. 11, 2010 - PRLog -- With unemployment becoming one of the leading triggers for mortgage default, the Dodd-Frank Reform Act will provide HUD with $1 billion, for implementation of the Emergency Homeowners Loan Program.
Designed to offer homeowners a "bridge loan" of up to $50,000 to assist eligible homeowners with past due mortgage payments expenses. This includes past due taxes and insurance and up to 24 months of monthly mortgage payments and mortgage & hazard  insurance premiums.
By providing assistance to homeowners in Puerto Rico and the 32 states not currently targeted by the Treasury's 2.5 billion Hardest Hit Fund program, HUD is attempting to reach out to struggling homeowners in states where local unemployment rates are at or below the national average.
According to HUD, “It is our intention for the program to begin taking applications from eligible homeowners by the end of the year. The Emergency Homeowner Loan Program will provide limited and targeted assistance to help working families get back on their feet and keep their home while they look for work.”

Further, the federal agency said, “In crafting this new loan program, HUD built on the lessons learned from Treasury’s Hardest Hit initiative to design and implement a program to assist struggling unemployed homeowners avoid preventable foreclosures. Together these two initiatives represent a combined $8.6 billion investment to help struggling borrowers.”
Qualifying for this program seems completely within the reach of many homeowners. They must be at least three months behind in their mortgage payments and have a “reasonable expectation of being able to resume repayment” of their mortgage payments and related housing expenses within two years.
The property must be the borrower's principle residence, and their only property. They must demonstrate both a minimum loss of at least 15 percent of their income and that that their mortage payments were within their means prior to suffering that loss of income.
The program's administration has been delegated to NeighborWorks America. Housing counselors who are part of NeighborWorks' Nonprofit, National Foreclosure Mitigation Counseling Program. They will be responsible for the coordination of community outreach functions,  intake counseling and document preparation.
HUD also has plans to contract with "an experienced entity" to offer strategic loan servicing, payment collection and distribution to servicers and loan balance management. In other words, making sure the program continues to be supervised, after its launch, therefore increasing the liklihood of successful outcomes.
Those state housing finance agencies already operating loan assistance programs HUD deems similar to its agency's new efforts, will be allocated emergency loan funds for distribution to borrowers in their states. The agency will also budget payments to these state agencies, covering administrative costs.
For a comprehensive list of all states slated to receive assistance through this program, and their respective budget allowances, visit HUD's Emergency Homeowner Loan Program – Summary.

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