By Jamie Smith Hopkins, The Baltimore Sun
7:35 PM EDT, September 29, 2011
State housing officials are working feverishly to beat a heck of a deadline: Finish processing enough applications by the end of Friday to make nearly $57 million in emergency loans to homeowners facing foreclosure — or give whatever they can't spend back to Uncle Sam.
Maryland's Emergency Mortgage Assistance program had approved $46.3 million in loans for 1,206 homeowners as of Wednesday, the most recent figures available. Staffers at the state Department of Housing and Community Development — who have been working nights and weekends to process applications — were hopeful Thursday that the rest could be committed before the short-lived program disappears.
After Maryland went through its original allotment, the state received about $20 million more to keep on going — a rare success story in a string of disappointments with federal foreclosure-help programs.
Of the $1 billion Congress allocated nationwide last year for the forgivable loans, no more than half is likely to be spent, the U.S. Department of Housing and Urban Development estimated Thursday.
HUD said many of the 100,000 homeowners who applied didn't qualify.
Critics said the effort was hampered because HUD didn't start accepting applications in much of the country until June 20, just a bit more than three months before the congressionally mandated deadline to get the processing done.
"It takes a while to get the word out; it takes a while for people to fall into the category where they're eligible; it takes a while to process applications," said Diane E. Thompson, an attorney with the National Consumer Law Center, who thinks the program should be extended. "This is not something that you can do quickly."
Maryland got a jump start of about 21/2 months because it was one of five states permitted to run their own versions of the federal Emergency Homeowners' Loan Program, which is aimed at unemployed homeowners, workers whose incomes were slashed by the recession and people dealing with a medical crisis.
The extra time made a difference. Lemar Wooley, a spokesman for HUD, said all five of the states running their own programs believe they will process enough loans to use up the money they received. Connecticut, like Maryland, received additional funding.
To qualify, homeowners must be three to 12 months behind on their mortgages and meet income criteria. The no-interest loans — up to $50,000 — can be used to pay past-due amounts and help with monthly mortgage payments for up to two years.
Five years after that, they turn into grants that don't have to be paid back, as long as recipients remain in their homes and stay current on their mortgages.
For Bill Stem, 59, the loan is "a lifesaver." The Reisterstown homeowner, laid off during the recession, was out of work for a year and a half. The landscaping job he landed last summer didn't pay enough to get out of that hole. He drained his retirement account, borrowed from relatives and sold items on eBay, but ended up four months behind on his mortgage.
The loan he received in July caught him up and is covering half his monthly payments. And this month, he started a job as the manager of a clothing store that pays better than landscaping.
"I'm looking forward to a future now," Stem said.
To spread the word about the program, Maryland housing officials held community events, opened their offices to walk-in applicants, organized telethons on local TV stations and even spent a day going door-to-door in Baltimore.
"We've been pushing hard from the very beginning," said Clarence J. Snuggs, the state's deputy secretary of housing. "It's our goal to obligate every one of the dollars."
Thousands of Marylanders asked for the help. The state accepted applications until Sept. 16 — and got about 200 the last day alone, said Jacqueline Lampell, a spokeswoman for the housing department.
Homeowners had to turn over income information and prove hardship, but some applications arrived without required documentation.
"We're making heroic efforts to get the paperwork in — we make sure we call people at home at night or on weekends if we can't get them during the day," Lampell said.
Not everyone waiting for word today will qualify. "But there will be many hundreds whose homes will be saved," Lampell said. "And that's what we've been working for."
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