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Program to help more families save their homes
Dec 08, 2012 4:00 pm
A program that has helped thousands already is broadening its limits to make an even greater impact.
Tennessee Housing Development Agency administers the federal foreclosure prevention program in Tennessee under the name Keep My Tennessee Home. Answering simple questions at keepmytnhome.org establishes eligibility. The program is designed for homeowners who have lost 30 percent or more of their income.
More than 2,400 Tennessee households have received financial assistance since the program began in January 2011.
The new maximum for assistance is $40,000 for homeowners across Tennessee. Households who are struggling because of extensive medical bills are invited to apply and those whose incomes have been reduced by a divorce or death of a mortgage payer. The eligibility changes are available to new applicants, not owners who have already been helped.
“Tennessee is doing a good job in assisting families as they regain their footing,” said Bill ClenDening, assistant director of Single Family Programs for THDA. “We are helping households as efficiently as we can and with the expanded eligibility will be able to help more people.
“We hope that neighbors will tell others about the program and the website as soon as a financial problem arises. This program is designed to cover mortgage payments while a homeowner gets back on his or her feet.”
The program, funded through the U.S. Treasury’s Hardest Hit Fund, is designed to help unemployed and substantially underemployed homeowners meet their mortgage obligations. Tennessee was allocated $217 million for the program which is administered by states’ housing finance agencies. The U.S. Treasury is encouraging more vigorous implementation because the foreclosure crisis has continued despite many efforts.
Additional funds have been assigned to the foreclosure prevention program from the state’s share of the National Mortgage Settlement. Tennessee Attorney General Bob Cooper allocated $25 million to THDA to assist homeowners who are struggling with their mortgage payments because of long-term medical hardships.
THDA is Tennessee’s housing finance agency. It has developed the application website and trained its network of foreclosure prevention counselors to process the applications. If an applicant meets the requirements, the applicant and a counselor are paired to process the application.
“The assistance is prepared as a loan,” said ClenDening, “but the loan is forgiven over five years, 20 percent per year. If the family keeps the home as their primary residence for five years the loan is completely forgiven.”
The foreclosure prevention counselors, who have been offering affected Tennesseans free counseling since 2008, prepare the documentation with the homeowner. If approved, payments are made directly to the servicer, the lender that collects payments from the homeowner. The loan amounts are up to $40,000 for up to 36 months for homeowners in all Tennessee’s counties.
THDA is working closely with Tennessee’s Department of Labor and Workforce Development. Brochures are available in packets given to persons applying for unemployment insurance and handed out when presentations are made to employees at workplaces that are making layoffs.
“THDA’s board of directors acted promptly in 2008 to provide and secure funding to prepare a foreclosure counseling program for affected Tennesseans,” said ClenDening. “The counselors have provided free counseling to thousands of people to help them assess their possibilities. Counseling is valuable, but if there is no income, the mortgage payment can’t be made. The Hardest Hit Fund may be able to help them hold on to their homes until they can be re-employed.
Foreclosure prevention counseling continues to be available free of charge to households struggling with their payments for whatever reason. THDA invites applicants to look here at the list of counselors. The Attorney General’s Office also allocated funds to supplement the free foreclosure counseling program across Tennessee.
For more information contact Patricia M. Smith at 615-815-2185.