For Latino homeowners facing foreclosure due to financial hardships, losing their homes may not be the only option. A state program helping homeowners in crisis has expanded its eligibility criteria, casting a wider net to give assistance until owners get back on their feet.
The Connecticut Housing Finance Authority’s Emergency Mortgage Assistance Program (EMAP) now allows homeowners with Federal Housing Administration (FHA) mortgage to qualify for assistance, whereas prior eligibility conditions ruled them out.
Borrowers facing foreclosure due to delinquent taxes, condominium fees or other assessments are also newly eligible. A final change now allows borrowers to retain up to $100,000 in pension and retirement funds, as long as they have been disclosed during the application process.
The state-funded program offers temporary assistance to homeowners who have faced a hardship that has affected their ability to make their mortgage payments. Homeowners with a documented hardship may receive loans for up to five years to assist with making payments.
EMAP was started in 2008 by the state legislature, which reactivated an older program in response to the housing crisis due to the recession. To date, they have helped more than 800 people keep their homes, Program Manager Valencia Taft-Jackson said.
Loans are granted based on individual circumstances and requires the borrower to contribute 35 percent of his or her income to the mortgage payment. EMAP then makes up the difference. Homeowners send their portion of the payment to EMAP, which then sends the full payment to the lender.
The program does not change the term of the mortgage, nor is it refinanced, but it will keep the owner’s payments current.
Loans issued by EMAP are “secured by a fixed-rate, subordinate mortgage on the homeowner’s residence,” according to the program’s website.
“Our goal is to help Connecticut homeowners threatened by foreclosure to stay in their homes,” Eric Chatman, President & Executive Director, CHFA said in a statement. “The Emergency Mortgage Assistance Program. . . keeps families together, keeps children in their schools, stabilizes neighborhoods and reduces the number of foreclosed properties on the market.
According to Taft-Jackson, most people who do not qualify are denied from the program solely because they require homeowners to have an income to participate.
“The program is dependent on that,” she said. “A lot of people who apply are unemployed or have insufficient income.”
When applicants are not accepted, EMAP refers them to housing agencies equipped to assist homeowners who do not have the funds to make their loan payments.
According to a report by the Center for American Progress, Latinos have been been among the hardest hit during the housing market collapse, due to being “disproportionately targeted” for riskier mortgage loans and “victims of predatory lending practices” by banks.
The report said 30.9 percent of Hispanics were offered risky subprime loans as opposed to 17.8 percent of whites.
PewResearch Hispanic Center also said that Latinos have been affected more than other groups by foreclosures. A 2011 study by the Center for Responsible Lending found that the rate of completed foreclosures originating between 2004 and 2008 was at 11.9 percent for Latinos compared to only 5.1 percent for non-Hispanic whites.
Although the program does not have statistics on who they have assisted by race, Taft-Jackson said a large number of homeowners they grant loans to are from urban areas around the state.
“We’ve just started to look at the demographics. . . A lot of people who use our program are in urban communities. . . The highest amount are from Bridgeport, Waterbury, New Haven.”
However, the program receives applications from all over Connecticut.
EMAP also takes proactive measures for owners whose homes are in jeopardy. Last year, they sent out 16,000 inquiry applications to owners who may have qualified for a loan.
Once a homeowner applies, he or she must call and answer a series of questions to determine eligibility. Factors include the nature of the hardship suffered and how delinquent payments are. Homeowners are not allowed to own other properties and must be the primary residence owner.
EMAP then puts a lien on the property, which goes behind the existing mortgage.
“It is a loan and it does have to be paid back at some point,” Taft-Jackson said. ” We look at them annually to see if their situation has been stabilized.”
Once the owners’ financial situation has sufficiently improved, payments on the loans begins.
Homeowners seeking assistance should contact CHFA at 877-571-CHFA (2432).
(Photo by JeffreyTurner via Flickr)