published Thursday, March 10th, 2011

Feds help local jobless pay on mortgages

Four years ago, Rebecca Guile thought she had achieved the American dream by buying a modest three-bedroom home in East Ridge.

“I thought it was a good investment and, unlike some people, I didn’t buy beyond what I could afford,” the 37-year-old single woman said Wednesday.

But since her marketing job at Comcast ended in December 2009, Guile hasn’t been so sure. She has used her savings, jobless benefits and odd jobs to keep current with her mortgage. But after 15 months of being without full-time work despite 30 job interviews, she worries about losing her home.

“I’ve been unemployed before, but never this long,” she said. “It’s scary.”

Guile and other unemployed Chattanoogans could get some help from Uncle Sam this year through the latest round of the federal Hardest Hit Fund designed to limit home foreclosures. For the first time, the government relief program will make monthly mortgage payments for up to a year or more for those who are unemployed or severely underemployed.

On Friday, Guile hopes to complete the paperwork to be one of the first to qualify for federal payments of her monthly mortgage bill under Tennessee’s $217.3 million share of the $7.5 billion federal program.

“This is unprecedented and could put a lot of foreclosures dead in their tracks this year,” said Jeremy Fitzsimmons, the homeownership manager for Chattanooga Neighborhood Enterprise, the agency administering the program in Southeast Tennessee.

Statewide, the Tennessee Housing Development Agency has designated CNE and 17 other groups to process applications and administer the new federal assistance. Over the past two years, THDA and its funded agencies have offered foreclosure counseling to more than 7,000 Tennesseans.

But the new federal program for the first time provides direct government payments for mortgage payments while unemployed or underemployed try to get back on their feet.

“This is not designed to reward deadbeat homeowners, but it does provide some valuable assistance to homeowners until they can find a new job and get their finances back in shape,” CNE President David Johnson said.

Tennessee’s Hardest Hit Fund will provide forgiveable loans to unemployed or substantially underemployed homeowners who, through no fault of their own, are financially unable to make their mortgage payments and are in danger of losing their homes to foreclosure.

Billed as “Keep My Tennessee Home,” the program will make homeowners’ payments on their mortgage and mortgage-related expenses such as property taxes, homeowner insurance, homeowner association dues and even past-due mortgage payments that accumulated during a period of unemployment.

Ted Fellman, executive director for THDA, estimates in Tennessee the program should provide mortgage payments for about 11,500 unemployed or severely underemployed homeowners. Fellman said THDA tried to create a simple model for payments to help ensure greater participation from the mortgage service companies which will be paid from the funds.

“Our goal is to process each approved application within 30 days,” he said. “This should help a lot more families stay in their homes and hopefully avoid some foreclosures and the disruptions that can cause.”

Last year, 39,206 Tennessee properties received a foreclosure notice, according to RealtyTrac

In Georgia, where 130,966 foreclosure notices were filed against properties in 2010, the Hardest Hit Fund will start on April 1 and will be administered by the Georgia Department of Community Affairs.

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