With the deadline for the Emergency Homeowners' Loan Program (EHLP) just a couple days away, HUD says it does not expect to meet the program's original goal of helping 30,000 homeowners, even after two deadline extensions.
""The main problems we are having are based on the statutory requirements of the program and the statutory time limits,"" stated a HUD spokesperson.
""Approximately, 75% of the rejections have been based on not meeting the criteria required by statute,"" the spokesperson added.
A spokesperson from NeighborWorks America says about 200,000 pre-application worksheets have been downloaded from the program's website.
EHLP was designed to provide bridge loans to unemployed and underemployed homeowners who face a temporary hardship and struggle to pay their mortgage payments in the interim.
According to a recent survey by COUNTRY Financial, about 68 percent of homeowners would default on their mortgage after nine months if they lost their job. Twenty-seven percent believe they would default after less than three months of unemployment.
In addition to facing involuntary unemployment or underemployment, homeowners must be at least 90 days delinquent and facing foreclosure and be able to illustrate a likelihood of reemployment.
""In spite of the narrow eligibility requirements in the statute, if there were more time we could reach more homeowners by extending the program and re-opening applications,"" stated a HUD spokesperson.
The original deadline for applications for the program was July 22. This deadline was extended to July 27, and was subsequently extended to September 15 for the participating 27 states and Puerto Rico.
Homeowners in Pennsylvania, Connecticut, Delaware, Idaho, and Maryland had until September 30 to apply through their state program.
Dodd-Frank allotted EHLP $1 billion, but it appears HUD will not use much of this funding.