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Advocates fear some could lose their homes while waiting on backlogged mortgage relief program

by Charlotte Keith of Spotlight PA |

During an event at the state capitol, Adam Goldman, a housing counselor at the Philadelphia Unemployment Project, urged the state to speed up the state's pandemic mortgage relief program.
During an event at the state capitol, Adam Goldman, a housing counselor at the Philadelphia Unemployment Project, urged the state to speed up the state's pandemic mortgage relief program.
Jelani Splawn for Spotlight PA

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HARRISBURG — Thousands of Pennsylvania homeowners who have been waiting months for help from a troubled state mortgage relief program are stuck in limbo — again.

Their situation is a consequence of the state’s efforts to fix the program, which launched in February 2022 with $350 million in federal pandemic aid to help homeowners catch up on their bills, but has been hamstrung by internal problems.

“We need to make sure no one loses their home while they’re waiting for help,” said Rachel Labush, an attorney at Community Legal Services in Philadelphia, at an event at the state Capitol on Tuesday.

Earlier this year, the Pennsylvania Housing Finance Agency, which oversees the program, announced it would take over from the company originally hired to run it.

More than 18,000 applications hung in the balance.

As a result of the change, homeowners who have already applied must sign up in the agency’s new system to get in line again. Until they do, their applications cannot move forward and they cannot receive assistance. About 55% of applications have not yet been registered in the new system, according to PHFA.

The agency sent applicants an email with a link to register, but some homeowners said they never received it. Others missed it, don’t use email regularly, or face language barriers, Labush said.

To protect homeowners while they wait, advocates want PHFA to give local courts information on who has applied, and for courts to pause foreclosures while those applications are processed.

“It really needs to speed up,” said Adam Goldman, a housing counselor at the Philadelphia Unemployment Project. Homeowners “should not be the ones who are punished because things have been moving so slowly,” he said.

PHFA spokesperson Scott Elliott said the agency is doing its best to “balance compliance to the program (making sure data is accurate and program requirements are met) with getting the assistance out as quickly as we can to PA homeowners.”

The sign-up link, and detailed instructions, were added to the program’s website in mid-June.

Elliott said the agency will also send instructions in the mail, and again via email, to applicants who have not yet registered. In addition, PHFA will hold a series of in-person events across the state in the counties with the most unregistered applicants, he said.

PHFA aims to prioritize the applicants at the greatest risk of losing their homes or having their utilities shut off, but with so many people waiting, the agency doesn’t always have a clear picture of who is in the greatest need.

Meanwhile, applicants who have successfully registered still face a wait of about two months, on average, before receiving the aid.

The program opened in February 2022 and offers grants of up to $50,000 to help eligible homeowners catch up on mortgage payments, utility bills, property taxes, and other housing costs.

But as Spotlight PA previously reported, homeowners seeking help from the program have faced long and uncertain waits — in some cases, more than a year. Some applicants with overdue utility bills had their service shut off while waiting. Others saw their credit scores plunge as they fell further behind on mortgage payments because of the delays.

Seeking to fix those problems, PHFA took over from the contractor originally hired to run the relief effort in March. The transition process has taken longer and been more complicated than the agency anticipated.

Given the delays, some homeowners likely no longer need the help. For many, though, the program is still their best chance at avoiding foreclosure.

The program has been closed to new applications since February to give PHFA time to work through the backlog. It’s not clear whether it will reopen, or how much funding will be left once existing applications have been paid out.

“We cannot afford to leave any of those dollars on the table,” said state Rep. Donna Bullock, (D., Philadelphia), at the event on Tuesday. “We simply cannot afford for any of our homeowners to slip through the cracks.”

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