Wednesday, August 31, 2011

HUD Extends Application Period for EHLP

On Tuesday, the US Department of Housing and Urban Development (HUD) and NeighborWorks America announced that they have reopened the application process for the Emergency Homeowners’ Loan Program (EHLP).

EHLP offers an ‘emergency bridge loan’ (mortgage payment assistance) of up to $50,000 for qualified homeowners who have experienced an involuntary reduction in income (due to medical or employment issues) and are at risk of foreclosure.

Several thousand EHLP pre-applications were received during the original enrollment period in July.  The majority of those did not meet the strict guidelines established by HUD and the Dodd-Frank Act.   Because of the high disqualification rate, HUD anticipates that there will be funding available to reach additional struggling homeowners, and has decided give additional homeowners the opportunity to apply for these funds during an “Open Enrollment” period.

However, homeowners need to understand two key points about this new open enrollment period:

  1. The strict qualifying guidelines still apply
  2. Open enrollment requires a COMPLETE application and supporting documentation

The strict guidelines include (but certainly aren’t limited to):

  • 90 days late as of June 1, 2011 and homeowners must still be at least 90 days late 
  • Must have experienced a documentable reduction of 15% in their income due to the economy or a medical condition (involuntary layoff or wage reduction, for example)
  • No sheriff’s sale scheduled within the next 30 days 

EHLP funds are provided to qualified homeowners on a first-come, first-served basis and it is critical homeowners provide all required application documents as quickly as possible, or they may risk losing the opportunity to apply for assistance.  In Minnesota homeowners should submit all documents before 4:00pm on Thursday, September 15th and understand that as the September 15th deadline nears, there may not be enough time to review application documents.  Submission of documentation does NOT guarantee that an application will be reviewed or accepted by HUD.

What should interested homeowners do?
Homeowners that are interested in applying for EHLP during the open enrollment period should contact their local Housing Counseling agency that is participating in open enrollment to see if they meet the strict program requirements and for information on how to apply.

  • Hennepin County residents, call Community Action Partnership of Suburban Hennepin at (952) 933-1993.
  • Carver, Scott & Washington County residents, call Carver County CDA at (952) 658-7878.
  • Dakota County Residents, Call Dakota County CDA at (651) 675-4555.
  • Residents of ALL OTHER MINNESOTA Counties, call LSS Financial Counseling at (800) 777-7419.

Additional information about EHLP and the strict eligibility requirements are also available on the EHLP Minnesota website:  

Wednesday, August 3, 2011

Homeownership Issues & The 2011 Legislative Session

This post is a guest post by Laura Hodges, AmeriCorps Member with the MN Home Ownership Center:
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2011 Legislative Update 

The 2011 legislative session at times got hotter than a July weekend. Combining that with the government shut down, Minnesota citizens might have questioned if the politicians were getting anything done. 
Well I am happy to report that lawmakers implemented two agreements during the most recent legislative session that offer additional protections to homeowners beginning August 1, 2011:

Mortgage Ownership Disclosure (Link)
This law updates an existing law that requires mortgage servicers to disclose to a borrower, upon request, who actually owns their mortgage loan and the contact information.  While this may be helpful for homeowners, it is especially helpful for Homeownership Advisors (foreclosure counselors) when working with homeowners facing foreclosure as the knowledge of who really owns the loan can be helpful when negotiating workout options.  

Extended Redemption Period for Reverse Mortgage Holders
The other change that was passed during the legislative session involves Reverse Mortgages. The law grants reverse mortgage borrowers, who have had a sheriff sale due to foreclosure, an extended redemption period of 12 months. This extension will give time for the homeowner to regain ownership if they can pay off the mortgage loan in full, or can be used as extended time to find alternative housing options. This change is welcome news for many reverse mortgage holders.

The Minnesota Homeownership Center would like to thank Laura for her valuable contributions to our work and mission over the past year.  You've been a great member of our team, and we wish you the best as you move on to pursue other goals!