Pa. agency that helps make homes affordable criticized for rule that forces some owners out

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Save Our Homes Coalition press conference to demand that the PA Housing Finance Agency stop forcing homeowners facing foreclosure to clear liens on their homes before they give them loan modifications.

PAT LOEB OCTOBER 03, 2019 – 4:00 AM

Listen to one minute KYW news clip from the press conference: https://kywnewsradio.radio.com/articles/news/agency-helps-low-income-folks-afford-homes-criticized

PHILADELPHIA (KYW Newsradio) — The Pennsylvania agency that helps low-income families get into affordable housing is being accused of forcing some families out of homes they own. Housing advocates say a recent rule change is increasing the number of foreclosures.

“I fell behind on my mortgage due to the passing of my father,” said Lisa McKenzie, who was so upset about possibly losing her home she could barely speak about it. 

But her story is similar to several others shared at a news conference held to protest the Pennsylvania Housing Finance Agency requirement that homeowners clear all other debt secured by their homes before they can modify their mortgages to avoid foreclosure.

“I’m just asking for PHFA to find in their heart to help me get a loan modification,” McKenzie said. 

McKenzie’s loan modification was turned down because she owes the water department money. She’s in a payment plan with the department, but PHFA requires the entire debt to be paid. 

PHFA spokesman Scott Elliot says that is a requirement of federal and state law.

“When there’s other debt, we are stuck,” he said, adding that 90 percent of the other debt is owed to the water department or Philadelphia Gas Works.

According to Elliot, the agency has modified 500 loans in Philadelphia in the last two years, and less than two dozen were scuttled by the requirement. He says those homeowners have been offered loans up to $1,500 to clear the other debt.

But Irwin Trauss, supervising attorney for the consumer housing unit of Philadelphia Legal Assistance, says the loans are only available if they cure 100 percent of the debt, and some homeowners owe much more than that. 

He says he plans to go to Harrisburg to ask PHFA to be more lenient.

“PHFA is doing this on a wholesale basis and there is no reason for them to do so,” Trauss said.

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