Relief to Prevent Foreclosure Still Available to Distressed Homeowners

Is there any relief in sight for thousands of Rhode Island homeowners who are in need of immediate assistance on making mortgage payments and avoid possible foreclosure?

Yes, there is, said Peter Walsh of Rhode Island Housing, who made his second visit to Coventry in nine months on Monday to discuss what Hardest Hit Fund Rhode Island can still do for homeowners who may be running out of options before their house may be foreclosed.

“We’ve helped with over 2,000 foreclosures and provided aid to over 1,000 families with 10 million dollars so far,” he said of an 18-state program by the United States Treasury with up to $80 million of funds in RI. “This fund has been established to prevent foreclosures and stabilize the Rhode Island housing market.”

Walsh said homeowners in the Ocean State have been affected in recent years much more than those in other states for two reasons: “the large amount of home value lost and high unemployment.”

“There is over 65 million dollars left to spend,” said Michael Chippendale (R-Dist. 40, Foster, Coventry, Glocester) who was there along with other local elected officials on behalf of their constituents.

Other representatives in attendance were: Patricia Serpa (D-Dist. 27, West Warwick, Coventry, Warwick), Jared R. Nunes (D-Dist. 25, Coventry, West Warwick), Scott Guthrie (D-Dist. 28, Coventry), and Lisa Tomasso (D-District 29, Coventry, West Greenwich).

“You can only apply if there has been a documented hardship,” Walsh emphasized. "Something has to have changed that made it difficult to make payments.”

Walsh listed several factors that could qualify homeowners for assistance: unemployed or underemployed, death or disability, unforeseen medical expenses and disasters leading to costly home repairs. "Loss of home value,” he noted, “is not a financial hardship.”

“You don’t have to be out of work to apply for aid,” Walsh said. “It just has to be a payment that’s difficult to make.”

“The most important fact to know,” he emphasized of eligibility requirements, “is if your monthly payment is greater than 31 percent of gross monthly income.

“We can help make immediate payment in some exceptional hardship cases; help with mortgage arrearment, help obtain loan modification or assist with relocation,” he added. ”We can provide up to $25,000 to advance loan modification but lender must agree to modification."

With a show of hands, at least two-thirds of the audience indicated they had received notification of the meeting through robo calling.

Throughout the hour-long public information session, many questions were asked by homeowners in this attentive audience of 60.

“Is there a federal law that requires them to tell you why your loan modification was denied?,” one woman asked. “They’re supposed to tell you,” was the quick response.

“Is this considered income when you file for your income tax?” asked one man. “The answer is no,” replied Walsh.

Depending on a homeowner's income and assets, the amount of money that might be available can range up to a total of $15,000 for no longer than 60 months. "There is a lien placed on your property and you must keep up with (reduced) mortgage payments."

“You should make a call soon to make an appointment with a counselor,”  Walsh urged. "You can only go to one counseling agency, including local banks or credit unions. But I recommend you talk to a certified counselor. It might take up to three weeks to get an appointment and you will have to have all your paperwork in order."

Walsh also warns of various scams purporting to help homeowners. You might get a letter or email that looks like it came from a bank or institution that says 'We put a lien on this property...' "If someone tells you, if you pay I will help you, run away," he said.

“You need to show this to family and friends,” Walsh said to the audience of the packets handed out to them. “This is just a temporary solution to help homeowners out until things improve. But the program will end at some point.”

For more information, call Rhode Island Housing at 401-277-1500.