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HEMAP – A Successful Program That Was Unsuccessful in Governor Corbett’s Budget
When Governor Corbett signed the budget June 30, 2011, he unfortunately signed away programs and services to Pennsylvania’s most vulnerable citizens.
One of those programs that took a significant hit included the Homeowners Emergency Mortgage Assistance Program or HEMAP.
HEMAP was created in 1983 to assist and protect Pennsylvania homeowners who are financially unable to make their mortgage payments and are in danger of losing their homes. HEMAP funds are loaned to eligible borrowers both to bring delinquent loans current and to assist borrowers in making monthly mortgage payments for up to 24 months.
The program is administered by the Pennsylvania Housing Finance Agency (PHFA). PHFA has helped more than 128,000 families since the inception of HEMAP and in turn, HEMAP has helped keep foreclosure rates relatively low and below those of other state housing finance agencies and the national averages.
According to PHFA’s annual report, HEMAP received more than 27,000 applications from July 2008 through June 2010, representing a 6 percent increase over the previous two-year period. Almost 6,000 of those applications were approved, also a 6 percent increase over the previous two years. Additionally, during fiscal years 2009 and 2010, the demand for HEMAP assistance had been at its highest it ever was.
Loss mitigation and foreclosure prevention programs such as HEMAP can reduce foreclosures and the probability of such losses, thereby supporting the financial strength of the program, as reflected in its asset-to-debt ratio (shows the proportion of a company’s assets which are financed through debt). PHFA’s single family portfolio had a foreclosure rate of only 1.07 percent at the end of 2010, as opposed to the national average of 3.09 percent, and despite an unemployment rate of over 8 percent throughout the past year.
HEMAP received just under $10.5 million in fiscal year 2010-11, which was an amount that kept the program operational. After Governor Corbett’s proposed budget for fiscal year 2011-12 eliminated all funding, PHFA was forced to begin shutting down the program. They began posting notices that after June 30, 2011 they could no longer accept applications. The influx of some federal dollars will be enough to run a very restricted version of a HEMAP-like program through September 30, 2011, but the $2 million appropriated in the final 2011-12 budget will not be sufficient to sustain the program that has kept so many Pennsylvanians in their homes. For PHFA's official notification, please click here.
I do not understand how such a valuable program could be so blatantly disregarded in this budget. Philadelphia Inquirer columnist, Monica Yant Kinney could not understand either. Be sure to read her most recent column, “Who Killed Pa’s Foreclosure-Rescue Program?”
For all things budget, please visit www.senatorhughes.com. Be sure to find Senator Hughes on Facebook and Twitter (SenatorHughes).
Offices of State
Senator Vincent Hughes