Chanting "Save Our Homes," members of a group working to help people facing home foreclosure marched down Sixth Avenue, Downtown, on Wednesday as the government introduced a $300 million program to help troubled homeowners swap mortgages for affordable loans.
Sign-carrying members of ACORN -- the Association of Community Organizations for Reform Now -- walked from the Duquesne Club to a local office of the Department of Housing and Urban Development in Heinz 57 Center on Sixth.
They then learned that applications for the new "Hope for Homeowners" program launched yesterday weren't available there.
"That's disappointing," said Alexander Banai, an electrician from Scenery Hill in Washington County, after hearing he'd have to instead try to contact HUD-approved counseling agencies or dial one of two toll-free telephone numbers to start the application process.
Banai needs help soon to avoid a foreclosure on his home, he said, because he can't afford an adjustable rate mortgage whose payments have gone from $653 to $1,058 in two years.
"Right now I think my interest rate is at 11.25 percent, and it probably will go up to 12 percent or higher in December," said Banai. "So my mortgage is going to be over $1,200.
"I'm just a working class guy, trying to do something with what I have," said Banai. "And I can't afford my own home."
Cheryl Campbell, director of HUD's Pittsburgh Field Office, said her staff was still getting acquainted with the program. "We want very much for Pittsburgh residents to have a successful experience," she said.
She told the nine-member ACORN delegation that HUD officials will do whatever they can to help as many local homeowners as possible.
She said information on the Hope for Homeowners program is available on HUD's Web site, and she and other staff members distributed information to the group.
Sources of help include a list of HUD-approved housing counseling agencies; the Federal Housing Administration's hotline number 800 (CALL-FHA); and a toll-free phone line of the existing Hope Now Alliance at (888) 995-Hope.
"For homeowners in trouble, this may be the help that they need," HUD Secretary Steve Preston said yesterday at a news conference.
To qualify, borrowers must be spending more than 31 percent of their income on mortgage payments. Loans made this year are excluded, except for those completed on Jan 1. Borrowers must have made six months of payments on their loans.
Lenders, rather than borrowers, will decide whether to participate in the program, which requires lenders to take a loss on the initial loan. Preston acknowleged that the government has not yet released a list of participating lenders.
Officials also did not have an updated estimate of how many homeowners were likely to qualify, beyond a Congressional Budget Office estimate from earlier this year that 400,000 borrowers would participate.
The program was passed by Congress this summer as part of a massive housing bill. It is one of several government efforts to stem the mortgage crisis.
Critics, however, call the government's actions sluggish and inadequate. Earlier action to modify loans, they say, might have prevented a $700 billion financial industry bailout now being debated in Washington.
"Some of these loans are so bad that they are driving people into foreclosure, and that's part of the problem," said Maryellen Hayden, head organizer for ACORN in Pittsburgh. "The homes of about 400 families a month in Allegheny County go to foreclosure, and we are really trying to stop this.
"We decided to come down here and ask for help because they took the help out of the $700 billion bailout package."
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