A foreclosure-prevention program that has provided nearly 750 loans to Connecticut borrowers in danger of losing their homes has been extended and expanded by state lawmakers.
The Emergency Mortgage Assistance Program, or EMAP, is expected to receive another $60 million in state bond funding and has been expanded to included FHA-insured mortgages, which had previously been excluded. The program, administered by the Connecticut Housing Finance Authority, has approved nearly $37 million in loans since 2008 when EMAP was put into place by the legislature.
The legislature gave final approval to the funding for EMAP in its special session Tuesday. The state bond commission must still approve the funding and Gov. Dannel P. Malloy must sign the legislation. Both are expected.
“As a result of the 2008 financial crisis, our housing market is still recovering slowly and many homeowners remain regrettably in difficult financial situations,” State Rep. William Tong, D-Stamford, and co-chair of the legislature’s banks committee, said. “This legislation is critically needed and will help homeowners who are struggling.”
A report to be released Thursday by RealtyTrac, the foreclosure tracking and marketing firm, shows the state may have made some headway in the foreclosure crisis. In May, there were 1,076 residential properties in Connecticut with foreclosure filings, down 16 percent from a year ago.
But those numbers don’t reflect mortgages that are in various stages of delinquency prior to foreclosure or those that are working through various stages of foreclosure.
The EMAP program got off to a slow start in 2008 because requirements were deemed too restrictive, particularly pertaining to what a constitutes a “financial hardship.” A year later, that term was expanded to include a sudden jump in medical expenses and other expenses in addition to a drop in income.
In addition to FHA-insured mortgages now qualifying, borrowers who are behind in payments for insurance, property taxes and condo fees may also qualify for aid, even if the borrowers are not yet behind in mortgage payments.
The CHFA also will now be able to consider the amount of time a borrower has been in their home and their ability to pay.
CHFA spokeswoman Lisa Kidder praised the extension of the program.
“It allows us to help many more residents who are in financial difficulty or behind on their mortgages,” Kidder told me.
EMAP loans must be repaid once the borrowers have regained their financial footing. The loans can catch up borrowers on delinquent payments or provide monthly assistance to make mortgage payments, or both. Those that qualify can receive as many as 60 monthly payments.
The loans are subject to yearly reviews. Borrowers must have had good payment histories prior to their current troubles.
EMAP also will be receiving almost $14 million from the state’s settlement earlier this year with five major mortgage services over mortgage practices.
For more information on how to qualify for EMAP, visit http://bit.ly/d6LUGy
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