HomeSafe Georgia, a much-criticized housing program designed to help unemployed Georgians avoid foreclosure, has received approval from the U.S. Department of Treasury to make some changes. The result, officials say, is that HomeSafe Georgia will be able to halt foreclosures sooner in the process.
Since its inception in April 2011, the federally funded, state-run loan program has used a homeowner's monthly income as the basis for calculating partial payments to be made by the homeowner. The amount increased every six months for up to 18 months. Even though the state made up the rest of the monthly cost, some jobless homeowners found the tiered payments beyond their means.
Now HomeSafe Georgia will pay off the full amount owed by homeowners who qualify. From that point, for the balance of the 18 months, the homeowner will be required to pay just five percent of his or her monthly household income.
In other words, explains HomeSafe Georgia Manager Brenda McGee, if a homeowner is four months behind on mortgage payments, HomeSafe Georgia will pay the full balance due and then provide assistance for up to 14 months. The assistance is in the form of an interest-free, forgivable loan.
The changes were made after housing counseling groups, some state officials and a report from the Special Inspector General of the Troubled Asset Relief Program criticized the program last month as slow to start and too strict in its parameters. HomeSafe officials said they've also adjusted the eligibility standards to allow more homeowners to qualify and has partnered with the state's Department of Labor to promote awareness of the program. The first event will be held this weekend in Carrollton.
The program's goal is to save 18,000 Georgians from foreclosure. Nearly 900 have been aided by the program so far, while nearly 2,600 have been deemed ineligible, according to the most recent quarterly report.
Georgia received about $340 million of the Hardest Hit Fund, a $7.6 billion-dollar effort geared toward the 19 states with the highest levels of foreclosure. The program runs through 2017.
McGee said homeowners who currently have loans with HomeSafe Georgia will see their payments adjusted to five percent of household income, while veterans and active duty military will be exempted. Homeowners will now be required to provide financial information every three months to demonstrate any changes in income, McGee said.
Officials previously said they were considering relaxing the requirement that homeowners be no more than six months behind on their payments to be eligible. But McGee said officials opted against that change.
"By limiting the number of months past due to six, the homeowner will have up to 12 months [of reduced payments] to find new employment," McGee said via email.
Still, McGee urged homeowners who may be slightly beyond the six-months window to apply. She said they could be eligible in certain circumstances, for instance, if they have applied for forbearance from their mortgage provider. For more information, visit www.HomeSafeGeorgia.com.
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