May 12, 2002

Helping Homeowners Stave Off Foreclosure

N June 2000, Eunice Miller, a single mother, purchased a 10-year-old three-bedroom ranch in Medford for $116,000. Just over a year later, with her hours cut back as a result of her employer's downsizing and needing money to purchase a car to take her to a second job and to pay for her daughter's college tuition, Ms. Miller found herself in default for three months on her $953.46 mortgage payments. She needed about $3,000 to stave off foreclosure.

In trying to resolve her financial problems, she said, she "was led through a series of false hopes and additional spending" that included a lender that offered a loan with 19 percent interest.

Eventually, she heard of the Long Island Housing Partnership, a nonprofit group based in Hauppauge, which through its new Homeowners Emergency Mortgage Assistance Program offers small loans with low interest rates for those in temporary financial distress. The pilot program, initiated last fall, has no income restrictions but is limited to Nassau and Suffolk residents.

After a period of counseling and a review of her credit and income to make sure she could handle additional debt, Ms. Miller was approved last month for a three-year loan for $2,969.46, with payments of $90 a month. She became the program's first loan recipient and so far the only one.

Building on a Housing Partnership counseling program that helps first-time home buyers get affordable mortgages, the new Mortgage Assistance Program will help homeowners who qualify to remain current on their mortgage by providing loans of about $3,000 to $10,000 at 6 percent interest.

"This is a small loan fund for people who need just a little gap financing to stay in their homes," said Jim Morgo, president of the Housing Partnership. "It will prevent them from going to lenders that could make their homes even more unaffordable with interest rates up to 13 percent."

A $3,000 loan such as that received by Eunice Miller "is not the typical loan a bank will make — it's too small," Mr. Morgo said. "Unfortunately, there are unscrupulous lenders out there who would make the loan."

http://www.nytimes.com/2002/05/12/realestate/12LIZO.html?pagewanted=print&position=bottom