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Seattle Considers Emergency Aid To Homeowners

Amy Radil
05/12/2008

In recent months, Congress and the states have worked urgently to find loans, lawyers and counseling to prevent home foreclosures. Today (Monday) the Seattle city council will vote on an emergency loan program. Experts say it's rare to see a CITY offer direct aid to homeowners. KUOW's Amy Radil reports.

TRANSCRIPT

SEATTLE'S FORECLOSURE PREVENTION PROGRAM IS SMALL IN SCOPE, BUT NOTABLE IN COMING FROM CITY RATHER THAN STATE GOVERNMENT. IF APPROVED BY THE CITY COUNCIL, THE PROGRAM WOULD PROVIDE $5000 LOANS TO FORTY QUALIFYING HOMEOWNERS WHO FACE FORECLOSURE. THE LOANS WOULD BE INTEREST–FREE, AND WOULD BE REPAID TO THE CITY WHEN THE OWNERS REFINANCE OR SELL THEIR HOMES.

BRENNAN: "Seattle as a city doing this really seems to be stepping up and taking on sort of a new role for cities."

MAYA BRENNAN IS WITH THE CENTER FOR HOUSING POLICY IN WASHINGTON, D.C. SHE SAYS THERE'S BEEN A FLURRY OF PROGRAMS TO AID HOMEOWNERS AROUND THE COUNTRY, BUT MOST HAVE COME FROM THE STATE LEVEL.

MASSACHUSETTS CAN GRANT A MORATORIUM ON FORECLOSURES. OHIO HAS RECRUITED ATTORNEYS TO OFFER FREE LEGAL ADVICE. AND PENNSYLVANIA IS OFFERING ITS OWN 30–YEAR FIXED RATE MORTGAGES, BECOMING THE BANK TO HOMEOWNERS FALLING THROUGH THE CRACKS.

BRENNAN: "They try to negotiate with the lenders to be able to basically buy the loan at the levels that the house is now worth and then set up an affordable payment option for the family."

WASHINGTON STATE OFFERS FREE COUNSELING FOR BORROWERS IN DEFAULT, BUT ALMOST NO FINANCIAL AID. OHIO IS ALSO OFFERING $5000 EMERGENCY LOANS SIMILAR TO SEATTLE'S. BRENNAN SAYS DELAWARE AND MARYLAND ARE LOANING HOMEOWNERS UP TO $15,000.

BRENNAN: "Often states have a little larger pocket books to be able to afford these loan funds which is why we often see them more so at the state than at the city level."

BUT SHE SAYS EVEN $5000 CAN GIVE THE HOMEOWNER BREATHING ROOM TO MEET A PAYMENT, REFINANCE OR SELL THE HOME. IF APPROVED, THE LOANS WILL BE ADMINISTERED BY TWO SEATTLE NONPROFITS, SOLID GROUND AND THE URBAN LEAGUE. CITY STAFFERS SAY THE MONEY WOULD BE AVAILABLE IMMEDIATELY, AND IF SUCCESSFUL THE PROGRAM COULD BE EXPANDED DOWN THE ROAD.

AMY RADIL, KUOW NEWS.

© Copyright 2008, KUOW

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