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State expands foreclosure-fighting program

Unemployed homeowners in North Carolinians can apply for help to a 5-year-old state program that has helped hundreds of homeowners avoid foreclosure and switch to new careers.

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RALEIGH, N.C. — A 5-year-old program that has helped hundreds of homeowners in western counties avoid foreclosure is being expanded into all of the state's 100 counties.
The N.C. Home Protection Program and Loan Fund gives temporary financial aid to help laid-off workers to keep their homes.

Michael Bacon, the wage-earner in a family of eight, said he lost a $150,000-a-year job in software development last November. Four months later, he worries about keeping his home.

"I might absolutely lose it," Bacon said. "I've got five kids still at home; I've got a girl in college. I'm not sure how I'm going to make it."

The Home Protection Program offers laid-off workers either a short-term loan to catch up on their mortgage payments or a long-term loan to help pay their mortgages while they get new job skills training. State law also requires lenders to give a 120-day stay of foreclosure to homeowners who have applied to the program.

Since 2004, the program has helped about 400 families stay in their homes, according to Charlene Smith, a mortgage financier with the N.C. Housing Finance Agency.

"We've seen people become MRI technicians, go back to school for nursing, go back to school for plumbing. They have actually gotten through with the program in a field, got a job, and they kept their home," Smith said.

The loan has a zero-percent interest rate and can be for up to $24,000, disbursed monthly for up to two years. Repayment is deferred for 15 years, unless the lienholder refinances or sells or rents the house.

To qualify for a Home Protection Program loan, a recipient must:

  • be a North Carolina resident
  • have lost a job in the past two years due to changing economic conditions
  • have a mortgage on real property
  • have had a stable employment and credit history prior to job loss

"Another factor that we look at it your credit. You know, we want to look at people who have actually made payments on time," Smith said.

The General Assembly approved $3 million for the program last year, and much of that is still available, Smith said.

Bacon might qualify for that program but said that he would approach taking any more debt cautiously.

"Even though it would be zero percent, it's still money that I have to pay back," he said. "Right now, I don't know how I could guarantee I could pay anyone back."

Smith urged laidoff workers with mortgage trouble to contact the Home Protection Program, even if they don't think they'll qualify for a loan. Last year, the program got housing counselors to work with approximately 2,000 people who didn't qualify for the loan, she said.

"They received budget counseling, and they were able to work out something with their servicer and were able to stay in their home, too," Smith said.

For the N.C. Home Protection Program and Loan Fund, contact your local housing-counseling agencies.
Find out about refinancing and loan-modification help from the federal government for Fannie Mae and Freddie Mac mortgages by visiting makinghomeaffordable.gov.
Other mortgage help from the state of North Carolina is available by calling 1-888-995-Hope or by visiting N.C.ForeclosureHelp.org


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