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More help available for struggling homeowners

New rules will make more homeowners eligible for assistance.

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By Chelsey Levingston, Staff Writer 9:47 PM Wednesday, February 8, 2012

More local residents struggling to make their home loan payments may be able to get financial assistance to avoid foreclosure.

Restoring Stability, an Ohio Save the Dream Initiative, changed its rules in January to make more people eligible for help making mortgage payments.

The program could have a significant impact in Butler County, where the foreclosure rate was the highest in the state in 2011, according to RealtyTrac Inc.

This was before President Barack Obama called this month for legislation to help more homeowners refinance their loans.

Some of the changes made are so underemployed people can get help to make monthly mortgage payments, said Cindy Flaherty, Restoring Stability director of homeownership. Previously, only the jobless were able to qualify. Mortgage assistance was also expanded so Restoring Stability can make full loan payments instead of only partial payments and qualified people can receive a maximum of $25,000, up from $15,000, Flaherty said.

Restoring Stability is the only statewide program with significant funds to make a real impact, said Bill Staler, LifeSpan chief executive officer. LifeSpan, a Butler County nonprofit social service agency, participates by providing local housing counseling.

“The Restoring Stability program is the only program out there that actually provides dollars to people experiencing trouble paying their mortgages. Everything else that is out there requires us to work with their mortgage lenders to try to negotiate a lower principal or lower payments,” Staler said. “It comes in and provides that gap money and that’s hugely important.”

Ohio Housing Finance Agency, the lead partner organization of Restoring Stability, received $570.4 million from the U.S. Department of Treasury’s Hardest Hit Fund to implement the program in 2010. Last year was the first full year of operation and through the end of January, 4,162 Ohio homeowners have received help from the Restoring Stability program, according to the agency.

“We should be able to help more people in 2012 than 2011 in part because the program is built up and because of the expanded eligibility,” Flaherty said.

Restoring Stability offers rescue assistance to help homeowners who have fallen behind become current on their loan payments, Flaherty said. It also offers mortgage assistance to help homeowners make loan payments up to 15 months. Now people, regardless of if they have a job, can get mortgage assistance as long as their monthly mortgage payments are greater than 31 percent of their income, she said.

The program also offers lien elimination assistance of up to $25,000 to help pay a lien to a mortgage servicer in exchange for canceling a debt, she said. Homeowners may also be eligible for transition assistance of up to $5,000 to help move if they have an approved short sale or deed in lieu.

Struggling homeowners can go online to apply at www.savethedream.ohio.gov.

“If you think you’re getting into trouble, you are and you should come in and see us,” Staler said.

To qualify, people have to have an involuntary hardship that caused a loss of income, such as a lost job, divorce or illness.

Flaherty said income limits have also changed to make more people eligible. It used to be a homeowner couldn’t have more than three months worth of mortgage payments in cash or liquid assets. That has been extended to six months.

“What we found is that people would kind of fluctuate between unemployment, then going back and getting a job, but still couldn’t make payments and getting laid off again,” Flaherty said. “People don’t neatly fit in a certain category where yes, you’re unemployed or no, you’re not unemployed.”

Contact this reporter at (513) 705-2551 or clevingston@coxohio.com.

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