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:
- The strict qualifying guidelines still apply
- 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: www.EHLPMinnesota.com.
The Home Affordable Unemployment Program (UP) went into effect (for non-GSE mortgages) on the first of July. The UP forbearance plan allows servicers to reduce or suspend a borrower’s payment while they are receiving unemployment benefits. Servicers are required to offer an UP forbearance plan to borrowers who meet the basic HAMP eligibility guidelines and have not previously received a modification through HAMP.
Unemployed borrowers must:
- Make the request for UP forbearance before the mortgage is seriously delinquent (before 90 days delinquent)
- Be unemployed at the date of the request, and be able to documents that he or she will receive unemployment benefits in the month of the "Forbearance Period Effective Date"
Servicers have some leeway pursuant to investor guidelines to require a borrower to receive unemployment benefits for up to three months before the forbearance period will begin, however the homeowner can make the request as soon as they become unemployed and are able to document he or she will receive benefits.
Unemployed borrowers who do not meet the UP forbearance criteria may be offered other forbearance programs. If not offered another forbearance plan, the borrower must be evaluated for HAMP. The HAMP evaluation will not include unemployment or severance payments in the calculation of gross income.
In addition, a borrower who was denied HAMP in the past may request UP if they meet all the eligibility requirements.
The UP forbearance period lasts a minimum of three months or until the borrower has become re-employed. It is up to the servicer’s discretion as to extending the forbearance period beyond three months. During the forbearance period the borrower’s payment will be reduced to 31% or less of the gross monthly income. The servicer has the option to suspend the payments in full, again at their discretion and according to investor guidelines. Any payments due during the forbearance period must be paid in the month due or the plan may be cancelled and the borrower will not be eligible for HAMP.
For additional details on UP, you can visit the Supplemental Directives page from available on the Making Home Affordable administrative website here.
If you're currently unemployed and receiving (or will receive) benefits... and would like to learn more about this program, contact a FREE non-profit Housing Counselor as soon as possible. In Minnesota, you can find your local Counselor, here.
The Minnesota Home Ownership Center has worked closely with the Anoka-Ramsey Community College on a number of outreach efforts to families in foreclosure in their service area.We've just been informed that the college has renewed its Workforce Retraining Initiative Grant into the Summer Semester of 2009.What is the Workforce Retraining Initiative Grant (WRI)? WRI provides summer courses at half price to those who qualify for unemployment!Anyone who is eligible for unemployment benefits, and has documentation from the Minnesota Workforce Center, is eligible to take advantage of the half-priced tuition option. For additional information, visit the College's website at: http://www.anokaramsey.edu/news/Story_604.cfmIf you're having difficulty making your house payment due to a reduction in work hours or unemployment - - don't despair! Contact a non-profit Foreclosure Specialist at once to discuss the options you have available to you. Services are FREE and CONFIDENTIAL!
