Del. mortgage help fund dwindling

Needs $720,000 through end of June
By LESLIE A. PAPPAS, The News Journal

Wendy Nurse would have lost her home without a $14,000 low-interest loan she got from the state of Delaware.

After the 47-year-old single mother from Newark was laid off from her hospital job in Philadelphia in June, she struggled to keep up with her $1,145 monthly mortgage payments, and was falling way behind by September.

When the Delaware Emergency Mortgage Assistance Program told her in December it would help her catch up on mortgage payments, "it really took a load off my shoulders," Nurse said.

But the state program that helps struggling homeowners facing foreclosure has run out of funds, recent data from the program show.

"In effect, we are out of money," said Matthew Heckles, legislative and policy adviser for the Delaware State Housing Authority. "We're right on the edge."

Technically, the Delaware Emergency Mortgage Assistance Program -- better known as DEMAP -- still has $69,360 left in the kitty until the end of the fiscal year '08, which ends June 30. But as of Friday, with 22 loan applications still in the pipeline and the average loan topping $12,500 (the maximum is $15,000), money is dwindling rapidly.

The money could run out in the next two weeks, said Anas Ben Addi, housing finance administrator for the Delaware State Housing Authority, which runs the DEMAP program.

Created to prevent foreclosures caused by sudden hardship, the DEMAP program is designed for homeowners who have fallen behind on their mortgages because of an unexpected illness, disability or disaster out of the individual's control. Homeowners who have no financial means to repay the loan once a mortgage resets would not qualify for DEMAP assistance.

Nurse met the qualifications for the DEMAP program when she applied in November. She had been in her home since 2001 on a 30-year fixed mortgage. Until she lost her job, she had kept up with mortgage payments. So when she fell behind, the DEMAP loan put her back on track. She is now working steadily and paying it off -- at $40 a month for the next 99 years.

"To me, it wasn't a bailout but just an opportunity for me to get back to where I was," Nurse said. "I didn't stop paying my mortgage because I went out and splurged. I didn't pay my mortgage because I lost my job. This could happen to any of us."

DEMAP started as a pilot program in fiscal 2007 with $229,000, and received $500,000 for fiscal year '08, which began in July. Since it began, it has helped 59 Delaware homeowners with a total of $704,304 in emergency loans.

"DEMAP was not meant for the adjustable-rate mortgages," said Gerry Kelly, Delaware's Deputy Bank Commissioner for Consumer Affairs. Kelly will be holding foreclosure prevention seminars today and Sunday to help borrowers who are struggling with adjustable-rate mortgages and may not qualify for the DEMAP program.

DEMAP says it needs $720,000 to finish out the fiscal year and asked for $1 million to keep the program going in fiscal '09. In her budget proposal last week, Gov. Ruth Ann Minner proposed $250,000.

Lt. Gov. John C. Carney Jr., head of the state's foreclosure task force, said he was "optimistic" the program would find the $720,000 it needs to get it through the end of June. The City of Wilmington has pledged $100,000 and New Castle County is expected to pitch in, Carney said.

"We're making some real progress," Carney said Friday. "I'm pretty confident that we'll be able to come close."