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DC homeowners wait for financial aid as foreclosure notices pile up

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Months before the bank posted a foreclosure warning on the front door of the home that Sunya Musawwir has owned for 30 years, the DC government told her they would take care of everything: Late penalties, fees, whatever it costs to bring her up to date on her mortgage.

But her debt — a constant reminder of the pandemic shutdowns that cost Musawwir her nonprofit job — grew by the week. So, too, did her anxiety.

Musawwir, 52, was among the first batch of DC homeowners to apply to the Homeowner Assistance Fund (HAF), a program meant to help Washingtonians keep their homes following pandemic-related hardships by providing money for mortgages, homeowner association fees, utility bills, internet service, insurance, delinquent property taxes and other penalties.

Musawwir sent in her application in December 2021. She owns a condo in one of the Zip codes that the District designated a high-need area, where the majority of homeowners are low income, Black and Latino, and at a high risk of falling behind on mortgage payments during the coronavirus pandemic.

Nearly a year later, Musawwir said, she has not received a dime from the program. The amount she owes the bank, meanwhile, has nearly doubled.

Musawwir is one of hundreds of DC homeowners whose cases remain caught in a process that advocates and homeowners have described as slow and opaque. Government officials and caseworkers blamed delays on mortgage servicers with requirements that, they said, have hampered the allocation of relief money. Meanwhile, protections that once shielded homeowners from foreclosure while they await HAF dollars have expired — only those who applied for help before Sept. 30 remain covered under the District’s now-lapsed foreclosure moratorium.

“I used to get anxious because of all these threats of foreclosure, but now I just feel mad. Because I went through this whole process, I got approved and I was told months ago it would take about 30 days for the government to have the payment to them,” Musawwir said. “Well, 30 days have come and gone and there ain’t nothing.”

The HAF program, funded by pandemic relief dollars from the US Treasury Department as part of the American Rescue Plan, began in DC as a pilot aimed at helping condo owners in Wards 7 and 8. In June, just eight days before a moratorium on foreclosures in DC was set to expire, the program was expanded to homeowners all across the city.

As of Nov. 1, the District has assigned about $1.7 million of the $50 million it received from the Treasury Department, according to the DC Department of Housing and Community Development. While more than 1,700 homeowners had applied for the program, less than 20 percent had received assistance, city data shows.

DC officials said that $38.9 million remains available for homeowner assistance and, unlike other programs that came with a hard use-it-or-lose-it deadline, the HAF will continue disbursing aid until it runs out.

Of the approximately 357,000 housing units in the District, according to the US Census Bureau, about 43 percent are owner-occupied. According to DC tax records, about 16 percent are senior citizens or disabled residents who are most likely to be on fixed incomes.

DC Mayor Muriel E. Bowser (D) won a third term this month after campaigning on ambitious plans for increasing housing and implementing a long-term plan to create 20,000 new Black homeowners in the District by 2030. Keeping homeowners in the homes they already own is crucial to this plan and, Bowser has said, to creating generational wealth for Washingtonians and preventing displacement in rapidly gentrifying areas.

For struggling homeowners, HAF dollars could make the difference between staying in their homes or being forced out.

“If I don’t get the help that this program is promising, I’m really screwed,” Musawwir said. “At one point, the bank was calling me almost every day, a couple times a day. They’re sending me notices, putting little tags on our door. I don’t know how many times I can tell them I’ve been approved for this program when they still haven’t received any money.

Musawwir, who lives in the Hillcrest Heights neighborhood of DC, has always been the breadwinner for her family — her husband is legally blind and one of two of her daughters, who is disabled, still lives at home. When the pandemic cost her the accounting job she had in early 2020, she tried to find creative ways to stay on top of her bills. She freelanced, drove for Lyft, did whatever she could.

Only recently, she said, has she been able to find part-time work.

“That’s how my mortgage fell into arrears,” she said. “I don’t need a handout, I just need a little bit of help so I can do what I always do: Pay my bills and keep it moving.”

Musawwir is among a number of homeowners who said they had been told to stop making payments on their mortgages while they await the outcome of the HAF process. In theory, they were told, the program will cover the extent of their debts, up to $100,000 in overdue payments and three months of future payments per household.

But as time drags on, and the amount she owes grows, Musawwir said, she has begun to question that advice.

Several community-based organizations, including the Latino Economic Development Center (LEDC), have been tapped to help homeowners with HAF applications, provide financial counseling and act as go-betweens for the homeowner and DC government, lenders and banks.

Emi Reyes, chief executive for LEDC, said there are a number of factors she believes are slowing down the process.

Mortgage servicers all have different systems, technology and senses of urgency, which, she said, can result in wildly variable timelines. Sometimes, in trying to get cases handled, Reyes said, her staff will learn that servicers have sold mortgages to a different company right in the middle of the process, forcing a restart.

“The other thing is every state is trying to do this at the same time,” Reyes said. “Some places like the District may not be as big a priority for these big lenders as clients in states with a much larger percentage of their mortgages, like California or New York.”

As part of the American Rescue Plan, the Treasury Department doled out nearly $10 billion in homeowner assistance funds, giving each state and territory at least $50 million to aid homeowners and stave off foreclosures.

And yet, advocates and attorneys said, it seems very few homeowners are aware of the program.

During the pilot phase of the program, which only encompassed Wards 7 and 8, DC received fewer than 200 applications for assistance, city ​​officials said. Since the program has been open to all, less than 1,800 people have applied.

“If even one homeowner who could have received assistance is foreclosed on during this process, that is one homeowner too many,” said Shirley Horng, a senior staff attorney with DC Legal Aid.

In recent years, a strong housing market has helped keep the foreclosure rate in the District low.

By the end of 2019, just before the pandemic was declared, foreclosures were at their lowest levels since 2005, before the Great Recession housing crash. According to ATTOM Data Solutions, DC was averaging about 10 foreclosures for every 100,000 homes.

Emergency pandemic measures that prevented banks from initiating them have kept foreclosures at bay throughout the public health crisis and its ongoing economic fallout.

But despite calls from advocates to extend protections against foreclosure for any homeowners who apply for the HAF, the DC Council passed legislation that shields only those who applied by Sept. 30 and requires banks to notify homeowners in default of the HAF program.

“The time limited nature of the protection is particularly troubling given that DC’s Homeowner Assistance Fund was one of the last in the country to open, with the full program not opening until June 22, 2022,” Horng wrote in a blog post urging action from the DC Council last month. “Moreover, the September 30, 2022, deadline is grossly incongruous with the scope of DC HAF, which may have enough funds to last for years.”

Reyes, from LEDC, said that whatever HAF funds don’t get used immediately can continue to provide relief to homeowners indefinitely.

She added that borrowers who are approved for HAF relief will see the entirety of their mortgage debts covered, as long as they are under the $100,000 per household cap.

Attorneys from Legal Aid DC, who represent dozens of homeowners seeking relief from the HAF, said they have seen some clients’ applications approved quickly — in under two months — but getting bills paid is a different story.

“Because there is not a concrete way to address these delays, we think the focus should instead be put into legal protections … so people are not in a state of limbo and stress that they may lose their homes while they’re waiting for HAF approval and payment,” Horng said in an interview earlier this month.

The risk of removal is higher for condo owners who are behind on Condominium Owner Association (COA) fees since the process for instituting a lien or initiating a foreclosure as a result of unpaid COA fees in DC is handled outside of court. About 30,000 condos in DC are owner-occupied, according to the DC Department of Housing and Community Development (DHCD).

Community advocates and lawyers said it seems that DC is prioritizing cases in which condo fees are at issue. But that has left other homeowners feeling forgotten.

One homeowner — a lifelong resident of the Brookland neighborhood in Northeast Washington who was just a few years away from paying off her mortgage when pandemic shutdowns cost her her job — said she sent in an application in June, as soon as the program opened up to homeowners in all DC Zip codes.

Nearly five months later, she is still waiting to hear whether she has been approved.

“When you see the bills come in and the amount keeps going up, going up, going up, and they’re saying don’t worry about it because this program is going to pay for it all, you start to wonder: How could that be true if everyone’s bills are increasing and no one has gotten a response?” said the homeowner, who spoke on the condition of anonymity for fear of jeopardizing her application.

“It’s not just stress,” she added. “It’s anxiety, frustration, feeling helpless and feeling like I’m an adult, I had control of my life, my finances all these years, but now it’s like you have no control over anything.”

DC Council member Janeese Lewis George (D-Ward 4), who pushed for the council to extend its protection for HAF applicants through the end of September, declined to say whether she would again attempt to extend protections for HAF applicants. But, in a statement to The Post, she said the government must do more to make homeowners aware of the HAF and what it covers.

“Preventing foreclosures for people who fell behind during the pandemic is critical for preventing displacement and promoting Black homeownership,” Lewis George said. “I’d like to see DC expand outreach efforts so more residents can take advantage of this program.”

Several advocates compared the HAF outreach effort unfavorably to the massive awareness campaign around the District’s rental aid program, STAY DC, which doled out hundreds of millions of dollars in pandemic relief money to struggling renters and their landlords faster than most other states did.

DHCD spokesperson Richard Livingstone in an email defended the outreach effort, which he called “extensive,” citing radio appearances, TV ads and notices in taxi cabs. In the final weeks of the foreclosure moratorium, he said, “multiple email and text blasts” were sent to homeowners reminding them to finish their applications.

“For those who remain at risk of foreclosure, DHCD is working closely with the judicial system, legal advocates and foreclosure prevention counselors to ensure that judges are aware of applicants’ program status at foreclosure hearings by providing daily reports to foreclosure counselors in the court room ,” Livingstone wrote.

Musawwir has lost track of the number of times she has had to explain the status of her HAF application to lawyers, lenders and advocates. Every week or so, the bank sends a new notice, threatening foreclosure.

Each new for-sale sign in her neighborhood, she said, sends her mind wandering down the dark paths of what-ifs.

“I can’t help it. I really don’t want to lose my home, because with everything that’s going on, where am I going to be able to afford to find something else?” she said. “Not in DC”

Kyle Swenson contributed to this report.

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