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Politics & Government

Local Groups Accepting Mortgage 'Bailout' Applications

The deadline to apply for a federal program that will provide interest-free loans to struggling homeowners is Friday. Groups in Westchester, Rockland and Putnam are accepting applications.

While there have been glimmers of hope that the national and local economies will eventually bounce back to their pre-recession states, many residents of the lower Hudson Valley are still unemployed or underemployed, and small businesses continue to struggle.

Job losses and long-term periods of unemployment mean tens of thousands of New Yorkers are now unable to afford their mortgages. Even those who only two or three years ago were living comfortable, sustainable lifestyles with six-figure incomes have found their lives upended as paychecks are harder to come by and the cost of living continues to increase.

In order to stave off yet another wave of home foreclosures, which are not only devastating to individual families but can have ripple effects on entire communities, the federal government is stepping in to offer a "bailout" of sorts to a specific set of homeowners.

Find out what's happening in Harrisonwith free, real-time updates from Patch.

The initiative, called the Emergency Homeowners' Loan Program (EHLP), offers interest-free loans of up to $50,000 to help pay mortgages and property tax and insurance bills. Twenty percent of the loan will be forgiven each year as long as a homeowner remains eligible—in other words, the federal government will partially subsidize those mortgages.

To qualify, homeowners must be at least 90 days behind on their mortgage payments and must have seen a drop in income of at least 15 percent since 2009. There are also household income limits, which vary by county; $126,350 for Westchester, $122,400 for Rockland and $95,050 for Putnam.

Find out what's happening in Harrisonwith free, real-time updates from Patch.

Pre-screening applications are being vetted by a handful of local non-profit groups; those who are eligible will be entered into a lottery next month. The deadline for the applications is this Friday, July 22.

Veronica Raphael, the director of foreclosure prevention at Westchester Residential Opportunities, said the response to the program has been underwhelming. She said she expected at least 200 applications, but as of Monday had received less than 60.

"We've had a slow response because the program has not been marketed very well, and because of the lack of time that we had," she said.

The response has also been slow in Putnam, according to Joan Fish of the Putnam County Housing Corporation. Her group has received about 15 applications and expected dozens more.

"It's really about getting the word out and letting people know this is a legitimate program; some people think it's too good to be true," Fish said.

Not so at the Rockland Housing Action Coalition, which has received more than 70 applications, according to foreclosure prevention specialist Stephanie Rojas.

"I expect about 100 applications. People are weary, and maybe a little embarrassed," Rojas said.

Some economists expect 2011 to be a record year for foreclosures, but the full extent remains to be seen as banks have stalled foreclosure proceedings to wait out a number of federal and state investigations.

One of the most high-profile probes is being conducted by state Attorney General Eric Schneiderman, who is looking into everything from alleged fraud on mortgage applications to the way home loans were chopped up and packaged into exotic financial instruments.

Rojas, of the Rockland group, said that while foreclosure filings are down, she has seen about 500 Rockland County homeowners fall 90 days behind on their payments each month this year.

"We've been lulled into this false sense of security, but once the attorneys work everything out it will be like a bomb dropping," she said.

You can download the EHLP application here, and then fax, e-mail or hand-deliver it to one of the following groups:

Westchester Residential Opportunities
470 Mamaroneck Avenue, White Plains
Fax (914) 428-9455
Email vraphael@wroinc.org

Rockland Housing Action Coalition
120-126 North Main Street, 1st Floor, New City
Fax (845)708-5798
Email rhachomes@aol.com

Putnam County Housing Corporation
11 Seminary Hill Road, Carmel
Call (845) 225-8493 x212

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