Press Contact Only:
Margaret Matrone, NCHFA, 919-877-5606,
Connie Helmlinger, NCHFA, 919-877-5607,
With the state’s unemployment rate topping the national average, a foreclosure prevention loan program especially designed for North Carolina is helping more than 4,500 homeowners who have lost their jobs in the downturn to keep their homes. Launched at the end of 2010, the NC Foreclosure Prevention Fund™ is adding 500 new clients a month and is on target to assist 21,000 in the next two to three years.
The NC Foreclosure Prevention Fund™ pays the mortgage for unemployed workers while they seek jobs or complete job training in a new field. Other homeowners, who have gotten behind on their payments because of divorce, illness or other temporary hardship, may also qualify while they look for work. The Fund provides assistance at no cost.
“The goal is to help responsible homeowners who are struggling through no fault of their own, to protect their homes while they get back on their feet,” says A. Robert Kucab, executive director of the NC Housing Finance Agency, the self-supporting state agency that designed and manages the program.
The loan funds come from the U.S. Department of the Treasury’s Hardest Hit Fund®, Kucab said. “North Carolina is fortunate to be among 18 states that Treasury invited to design foreclosure prevention programs to address high unemployment.”
“Every foreclosure we can prevent helps the state’s economic recovery by protecting property values and the local tax base,” Kucab said. “So far, the Fund has kept $523 million of property out of foreclosure. It is helping stabilize property values and the local economy in 506 communities—97 counties—across North Carolina.”
Mortgage payment assistance is provided as a zero-interest, deferred loan of up to $36,000 or 36 months of mortgage-related payments. After the assistance period, homeowners resume making their own mortgage payments. If the owner continues to live in the home for at least 10 years, the loan is considered satisfied and no repayment is required.
One homeowner who is benefitting is Tonia Jackson, of Raleigh, who sought help after being laid off from her communications job and depleting her savings.
“The NC Foreclosure Prevention Fund has been a true blessing,” Jackson says. “Working and living independently has been how I judged my personal success, so seeking assistance was difficult; but it has let me concentrate on getting back into the workforce.”
To be eligible, homeowners must have an acceptable mortgage payment history prior to the job loss or hardship, have potential to resume their mortgage payments once the assistance ends, and meet other program guidelines. The hardship should have occurred on or after January 1, 2008.
The NC Foreclosure Prevention Fund™ also offers zero-interest loans to pay off a second mortgage as a way of reducing the total homeowner’s monthly payment. This can help a homeowner who finds a new job, but at reduced income. For some, paying off the second mortgage can reduces the total monthly payment to an affordable level.
This assistance was crucial for a Charlotte woman who did everything right. After being laid off from her job of 17 years, she returned to school to become a licensed practice nurse and successfully returned to the workforce, only to find her mortgage payments were unaffordable. A second mortgage loan reduced her payments to a manageable amount.
The second mortgage assistance is a zero-interest, deferred payment loan of up to $30,000 to pay off an existing second mortgage. Borrowers must have a good mortgage payment history for six months prior to the initial job loss or hardship. The loan is paid back when the homeowner sells or refinances the home.
According to Kucab, one goal is to help homeowners recover before they exhaust their retirement funds and ruin their credit. Homeowners do not need to be behind on their mortgage payments to apply for assistance. Eligible homeowners can apply for the NC Foreclosure Prevention Fund™ through one of 40 participating HUD-approved counseling agencies statewide.
SIDEBAR: Free Foreclosure Prevention Event, March 24, in Raleigh
Homeowners struggling to pay their mortgages may get help at a Free Foreclosure Prevention Event at the McKimmon Center in Raleigh, March 24, 9 a.m. – 7 p.m.
Sponsored by the NC Housing Finance Agency, the event will allow homeowners to meet with servicers about modifications or explore their options with housing counselors. Eligible homeowners may apply for the NC Foreclosure Prevention Fund™ onsite.
Homeowners will need to bring several documents with them. For a list of documents and to learn more, call 1-888-623-8631.
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The North Carolina Housing Finance Agency is a self-supporting public agency. It has financed 206,000 homes and apartments in the last 35 years. It offers the NC Foreclosure Prevention Fund™ with funding from the U.S. Department of the Treasury’s Hardest Hit Fund®, which was authorized under the Emergency Economic Stabilization Act of 2008. The Hardest Hit Fund®, is available in 18 states and the District of Columbia, which have experienced high unemployment or a steep decline in property values. North Carolina was selected because of the large percentage of the population living in counties with high unemployment rates in 2009.
