Refinancing Program For At-Risk Homeowners With Mortgage Problems
BY JOHN TOSCANO

"Home ownership is crucial to growing our economy throughout New York State. This innovative program will help address the foreclosure crisis by offering at-risk families mortgages they can afford so they can keep their homes for years to come."

Homeowners with risky mortgages, placed in jeopardy by the shaky mortgage market, will have the opportunity to refinance and avoid possible foreclosure under a $100 million program announced on Monday by Governor Eliot Spitzer.

In announcing the program called "Keep the Dream", the governor stated: "Home ownership is crucial to growing our economy throughout New York State. This innovative program will help address the foreclosure crisis by offering at-risk families mortgages they can afford so they can keep their homes for years to come."

According to the governor's announcement, Keep the Dream is targeted for low-, moderateand middle-income homeowners. Eligible borrowers can have incomes of up to 165 percent of the area median income in New York City and several other counties.

These income ceilings will range from $58,120 in Alleghany County to $82,870 in Albany County to $93,720 in New York City.

Lenders in New York State will begin to offer mortgages backed by SONYMA (State of New York Mortgage Agency) under the Dream program, starting next September 4.

Refinancing loans can be as high as $417,000 and financing will be available for up to 100 percent of the value of the borrower's property, the governor's announcement said. Proceeds of the mortgage can be used to pay prepayment penalties and closing costs and pay off most second mortgages.

The Keep the Dream refinancing program is designed for borrowers who have adjustable or interest-only mortgages where the interest rate has just increased or will increase in the near future, Spitzer's announcement said. Eligible borrowers will have to show that they have experienced a mortgage payment hardship or will experience a hardship in the near future. Borrowers who are less than 60 days behind on their mortgage payments because of a payment increase may also be eligible for the program.

Many homeowners are facing mortgage problems because they have adjustable rate mortgages that will be reset at higher interest rates in the coming 18 months.

The Dream program was formulated by a task force the governor created last March to address the crisis in the subprime mortgage market. SONYMA, through partnerships with mortgage lenders and mortgage insurance companies, will offer at-risk homeowners the ability to refinance their current mortgages with 30-year or 40-year fixedrate mortgages at competitive interest rates.

SONYMA Chief Executive Officer, Priscilla Almodovar, stated: "Our mission at SONYMA is to help working-class families buy their first home and keep their homes. That is why our Keep the Dream program is so important, because it will give families in danger of losing their homes the ability to refinance their mortgages and remain as homeowners."

As part of the program, homeowners refinancing their mortgages will be required to complete a homeowner education course. They will also receive homeowner counseling to help avoid the pitfalls of predatory loans and foreclosure proceedings.