Pennsylvania Banking Secretary Vows to Help Homeowners Avoid Foreclosure

The Philadelphia Inquirer

Jane M. Von Bergen

January 14, 2004

Jan. 14--Pennsylvania Banking Secretary A. William Schenck 3d promised a group of struggling homeowners yesterday that he would do more to help save their homes from foreclosure.

His promises, made at a meeting of the Philadelphia Unemployment Project, come as the city faces a record number of foreclosures -- 822 in February, or 1,100 if leftover properties from previous months are included.

"I know there are serious concerns," said Schenck, who vowed to lobby the legislature for more money for a program to aid struggling homeowners.

"When you come to a meeting like this, you begin to understand the impact on people's lives and how important it is that we do something. The more I learn, the stronger I'll be in making more arguments to the legislature," he said.

Foreclosures -- the sales that happen when people do not pay their mortgages -- are rising around the nation. Pennsylvania has the sixth-highest rate. In Philadelphia, 734 houses were offered for sheriff's sale in January, up from 432 in January 2001, near the official start of the recession in March 2001.

"I'm encouraged," said John Dodds, director of the Philadelphia Unemployment Project. "We have a cabinet-level officer calling for money to fund the program."

The 50 or so homeowners and counselors who crowded into a conference room yesterday had a list of complaints. Among the most serious were problems with Pennsylvania's Homeowners' Emergency Mortgage Assistance Program, set up in the early 1980s to lend mortgage money to reliable payers who had fallen on temporary hard times because of unemployment or illness.

They complained that the agency had a "culture of denial" that prompted it to turn down most applicants, granting less than one in four. Because there were so many denials, housing counselors did not push the program. Also the application process was too confusing, and out-of-state mortgage lenders often did not know about or send the required paperwork on time.

Brian Hudson, head of the Pennsylvania Housing Finance Agency, which oversees the emergency program, told the group that he had already increased the approval rate from 22 percent to 27 percent.

He promised to add training for counselors and to be flexible about timing issues.

Other complaints included excessive lawyers' fees and inflexible lenders.

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