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Good News for Unemployed Workers: Statewide Effort Helps 20,000 Keep their Homes

Release No. 090115-16

Press Contact Only:
Connie Helmlinger, NCHFA, 919-877-5607 cshelmlinger@nchfa.com 
Brian Rapp, NCHFA, 919-877-5655 bprapp@nchfa.com


Labor Day is traditionally a time to celebrate workers and the contributions they make to the nation’s economy.

But in North Carolina, almost 6 percent of the state’s labor force – more than 279,000 – won’t be celebrating. Instead, they face a continuing struggle to find work and keep their homes out of foreclosure. For these displaced workers, the North Carolina Foreclosure Prevention Fund offers hope.

This summer, the Fund passed the 20,000 milestone of homeowners it has helped keep their homes while they recover from a temporary financial hardship such as the loss of a job. It has resources to help 3,000 more.

Offered by the NC Housing Finance Agency, the effort was created in 2010 in response to the state’s widespread unemployment. Funding is from the U.S. Department of the Treasury’s Hardest Hit Fund. While the economy has improved, unemployment in North Carolina still exceeds the national rate, and more than 14,000 foreclosure notices have been filed so far this year.

“Every foreclosure is a huge loss for not only the homeowner’s family, but also for the state’s economy,” said Bob Kucab, executive director of the NC Housing Finance Agency. “The average foreclosure is estimated to cost the community $80,000 in losses to the homeowner, lender, businesses and local government—including lost taxes and depreciating property value. “So far, the NC Foreclosure Prevention Fund has preserved more than $3.6 billion in property alone.”

The NC Foreclosure Prevention Fund makes monthly mortgage payments on behalf of qualified unemployed homeowners while they look for jobs or complete job training. Veterans preparing for civilian employment by enrolling in training or attending school under the GI Bill, as well as people who are back in the work force but at reduced wages, and those on fixed incomes, may also qualify for assistance.

How well has the program worked? Of the homeowners who have completed assistance since 2010, 98 percent have avoided foreclosure.

For example: a Wilmington father who lost his job in restaurant management was able to keep his home and eventually manage another restaurant; a Charlotte auditor kept her home during a year-and-a half-long job search; and a single mother in Clayton, laid off by a medical testing company, is now training to become  a nursing assistant.

There is no cost to homeowners for the assistance, and homeowners do not need to be behind on their mortgage payments to qualify. Assistance is offered in two forms:

  • A zero-interest, deferred loan of up to $36,000 paying mortgage and related costs for up to 36 months while the unemployed homeowner seeks or retrains for a job. Loans can also be used to bring a mortgage current or help pay the mortgage for re-employed homeowners who are earning less while they look for higher paying work. The loan is forgiven after the homeowner lives in the home 10 years.
  • A zero-interest loan to pay off a second mortgage. This can reduce the homeowner’s total monthly payment to an affordable level, and can help a homeowner who finds a new job, but at reduced income.

Eligible homeowners can apply through 40 participating HUD-approved counseling agencies or online at www.NCForeclosurePrevention.gov.
For more information, call 1-888-623-8631, or go to www.NCForeclosurePrevention.gov.

[Editor: County and City Date on the number of homeowners helped and amount of property value saved can be found at http://www.ncforeclosureprevention.gov/stats.aspx.]

SOURCES:

5.9% Unemployment -- NC Department of Commerce – Labor and Economics Analysis Division Press Release 7/29/15

2,400 Foreclosure Filings per Month – NC Administrative Office of the Courts Release 7/16/15

$80,000 Average Cost of a Foreclosure to the Community -- “Sheltering Neighborhoods from the Subprime Foreclosure Storm,” U.S. Congressional Joint Economic Committee Special Report, April 2007

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