Iowa’s Attorney General says a program that helps people who can’t pay their mortgages is going run out of its own money in a few months if action isn’t taken. The Iowa Mortgage Help Hotline began in 2008 to help people in the state who were in danger of foreclosure on their homes in the wake of the mortgage crisis.
Attorney General Tom Miller says a majority of the funding for the hotline comes from the federal government and it’s on course to run out by June. Miller says the federal government money is dwindling as the overall funds go down and more states have set up operations to use the money. He says it will take between $750,000 and one-million dollars between June and January when they think additional federal money may be available. Miller is asking state legislators to take action to supply money for those six month.
Miller says he’s discussed legislation that would allow the Iowa Finance Authority to take some money from their trust fund to go toward the hotline. He says they’ve also talked with congress and federal official about additional money. “We need to find money somewhere,” Miller explains.
The line is long for agencies and programs seeking more state funding from legislators, but Miller says this can be done without impacting the state budget. “We’re not asking them at this point for their money, the general fund dollars that are so scarce,” he says, “at this point we’re merely asking them to authorize the Iowa Finance Authority to use some of the money in a trust fund that’s developed over time for these kinds of purposes to be used. If there are additional dollars available in the legislature, certainly this is an important cause as well.”
Loan servicers and lenders benefit from the program when loans are modified and they are able to get more money than if a foreclosure takes place, and Miller was asked if they might chip in some money. “We’ve thought about trying to seek some money from them, and that’s still a possibility,” Millers says, “I think the problem is the sort of perceived conflict if they’re funding a program that’s really representing the homeowners. But we haven’t ruled that out, particularly if we get really desperate.”
Miller does not know exactly how many home foreclosures may’ve been stopped by the program. But he says it doesn’t appear the need is over, as the hotline is getting an average of 20 calls a day seeking information. Miller says many of the calls now are fueled by people who have lost their job and are trying to keep up with their mortgage. He says they have dealt with many of the mortgages that were a result of the “worst practices of the mortgage” companies in 2006 and 2007.
The program has had 9,000 applications for help thus far. If you are in need of mortgage help, you can call: 877-622-4866, or go on-line to :www.iowamortgagehelp.com.