HUD Allocates Funding Under Emergency Homeowners Loan Program

Posted by Orb Staff on October 08, 2010 No Comments
Categories : Mortgage Servicing

The U.S. Department of Housing and Urban Development (HUD) has unveiled state allocations and a program framework for its Emergency Homeowners Loan Program (EHLP), a $1 billion initiative meant to help borrowers who are struggling to pay their mortgage because of unemployment, underemployment or a medical emergency. The program, a provision of the Dodd-Frank Act, provides eligible borrowers with a bridge loan of up to $50,000.

Borrowers can use the money to cover arrearages, as well as up to two years of monthly payments on their mortgage principal, interest, mortgage insurance premiums, taxes and hazard insurance.

HUD announced allocations for Puerto Rico and the 32 states that are not receiving money through the state housing finance agency Hardest Hit Fund. Allocations range from $1.32 million for North Dakota to $135.42 million for Texas.

Nonprofit housing counselors who are part of the National Foreclosure Mitigation Counseling Program administered by NeighborWorks America will be tapped to provide intake and outreach services, including initial borrower eligibility screening and collecting and assembling homeowner documentation.

HUD says it will contract with a fiscal agent that has ‘extensive loan servicing and funds control capabilities’ to collect payments from borrowers and distribute the payments to servicers.

State housing finance agencies that have similar assistance programs for unemployed borrowers will receive allocations to fund bridge loans and cover administrative costs.

SOURCE: HUD

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