Answers
Q1.When can I expect my reinstatement payment to be sent to the bank/servicer?
A. Each bank/servicer reinstatement quote comes with a “good-through date,” which tells us how long the reinstatement figures are still valid. The good through date is listed on the bottom right of your settlement statement. DHCD will forward the reinstatement payment to the bank/servicer no later than the good-through date provided to DHCD by the bank/servicer, which may be 30 days or more after your EMA loan has closed.
However, there may be delays in certain circumstance – such as if your loan is the first EMA loan to be established with your bank/servicer, if your loan was previously assigned to a foreclosure attorney, or if your loan has been sold to another bank/servicer. If these delays require additional EMA funds to fully reinstate your mortgage, DHCD will determine the appropriate next steps and notify you.
A. Your payment will be deposited in DHCD’s bank account upon receipt. Your first full mortgage payment, including the portion to be paid by DHCD, will normally be sent to the servicer no later than the 16th of the month shown on the bottom left of your final commitment letter as “This payment will be for the month of ______.” This blank will be filled in on your settlement sheet. As an example, a payment for the month of November will normally be sent no later than November 16. You will need to send in monthly payments starting the following month, as detailed in the 2nd bullet of #10.
A. Your portion of the monthly mortgage payment must be received at DHCD on or before the 1st day of each month. Payments may only be made by money order or certified/bank check made payable to DHCD-EMA, and forwarded to the Maryland Dept. of Housing and Community Development – EMA Program, P.O. Box 252, Crownsville, MD. Please put your first mortgage account number, your name and address on your payment.
Your payment will be deposited in DHCD’s bank account upon receipt. Your full mortgage payment, including the portion to be paid by DHCD, will be sent to the servicer no later than the 16th of each month.
A mortgage payment cannot be sent to the bank/servicer if you have not submitted your portion of the mortgage payment to DHCD. In addition, not submitting your portion of the monthly payment constitutes automatic default on your EMA loan and will trigger collection actions and likely resumption of foreclosure actions by the bank/servicer holding your mortgage.
If you are having or anticipate having trouble making your portion of your mortgage payment as detailed in your commitment letter, we strongly encourage you to contact DHCD’s Deborah Gillen at (410) 514-7478 or Ebony Rector at (410) 514-7654 for assistance.
- The reinstatement amount may not yet have been sent by DHCD to the bank/servicer if the good-through date is in the future.
- The reinstatement amount or monthly payment may have been sent to the bank/servicer, but may not have been applied to your account by the bank/servicer. It normally takes the bank/servicer 7-10 business days to apply EMA funds. However, in some instances there can be technical issues that delay the application of EMA payments. DHCD has been working closely with the banks/servicers to resolve these issues as quickly as possible.
- Until the EMA reinstatement payments are applied by your bank/servicer, your account will continue to be shown as delinquent. However, your account should be flagged and shown as enrolled in the Maryland EMA program. Most banks/servicers have agreed to stop collection efforts and waive late fees for EMA borrowers once the EMA loan has been approved, as long as the reinstatement amount is received by the good-through date quoted by the bank/servicer.
A. Since Maryland’s EMA program is part of the federal government’s Emergency Homeowner’s Loan Program (EHLP), most banks/servicers have assigned a specialized team within the bank/servicer to work on these programs. When EMA borrowers try to call in to talk about their account, they often find that the bank/servicer's Customer Service Representatives (CSRs) are unaware of the EMA program or the fact that an EMA borrower is part of EHLP. It can also take time for the section of the bank/servicer that deals with payment receipts to communicate with the sections of the bank/servicer handling collection activities and foreclosures.
We understand and sympathize that this creates a very frustrating situation for EMA borrowers, as CSRs are often skeptical about what borrowers tell them about their EMA loans. When talking to a CSR, ask them if your loan has been flagged as being enrolled in the EMA or EHLP programs. Some servicers have not set up a separate category for EMA/EHLP borrowers, but instead show them as enrolled in the federal government’s Hardest Hit Funds (HHF) program, which was established before EHLP. The CSR may be more familiar with HHF or EHLP than Maryland’s EMA program.
Sometimes an account has not been flagged, which can be corrected fairly quickly. If the CSR indicates that your account is not flagged, please contact DHCD using the contact information in #8 and we will work with the bank/servicer to get your account flagged. Unfortunately, we have discovered that, in some instances, even when accounts are properly flagged, calls and letters may continue to be automatically generated by collection firms operating as subcontractors for the banks/servicers and that it can take some time for the bank/servicer to identify and resolve the problem. If this is the case, DHCD will work with you and your bank/servicer to address this as quickly as possible, although some situations are taking longer to resolve than expected.
A. Fees may be included in your online statement that will be waived when the bank/servicer applies your reinstatement payment. Once the bank/servicer has applied the reinstatement payment, DHCD will determine if there are any differences in the amount and if these differences are appropriate given our agreement with your bank/servicer. Should additional EMA funds be required to fully reinstate your mortgage, DHCD will determine the appropriate next steps and notify you.
A. It takes time for DHCD to process the receipts that we receive and make payment to the bank/servicer and then it takes the bank/servicer 7-10 business days to apply the funds that DHCD has sent to individual borrower accounts. While banks/servicers have agreed to waive late fees for EMA borrowers, in many instances their systems automatically generate late notices since the payments have not yet been applied.
A. Late payments and foreclosure actions prior to the bank/servicer’s application of the reinstatement payment from your EMA loan will continue to be reported on your credit report. The application of EMA reinstatement funds does not repair past negative credit activity. If your credit report shows late payments after the date of the application of EMA reinstatement funds, please contact DHCD using the contact information in #8.
A. It helps us if you can send an email explaining your questions to all of the following email addresses in the DHCD Finance Department: brinkley-hall@dhcd.state.md.us, backstrom@dhcd.state.md.us, howardi@dhcd.state.md.us, harvey@dhcd.state.md.us, traylor@dhcd.state.md.us. If you don’t have access to email, please call the EMA voicemail line at 410-514-7268 and press “1” for payment questions to leave us a message. Please be sure to speak clearly and slowly.
Whether contacting us by email or phone, please include your name, property address, EMA loan number and phone numbers (both home/cell and work) so that we can quickly locate your account information and respond to you.
- If you receive an overage check or any type of reimbursement amount from your lender, contact DHCD immediately using the contact information in #8. DO NOT deposit or cash these funds as they MUST be sent to DHCD.
- If you EMA loan includes monthly payment assistance, ensure that your portion of the monthly mortgage payment is received at DHCD by the 1st of each month.
- Once your EMA assistance ends, make your mortgage payments to your bank/servicer on time.
- Report changes in your income, employment or first mortgage total payment amount.
You must report changes in your income, employment or first mortgage total payment amount during the entire period of time you receive assistance under the EMA program. If your income, first mortgage payment amount, or employment status changes, you have 10 business days to notify DHCD of these changes by calling Deborah Gillen at (410) 514-7478 or Ebony Rector at (410) 514-7654.
- Promptly respond to calls and letters from DHCD, including requests for income verification. During the period of time the EMA program provides assistance with the monthly payments on your first mortgage, DHCD will send periodic requests to verify your current income and expenses. You will have 10 business days to fill out the form and return it and the required income documentation to DHCD.
A. Failure to comply with EMA payment and reporting requirements may result in default of your EMA loan, including discontinued assistance with monthly mortgage payments and resumption of foreclosure proceedings by the bank/servicer.
In addition, instead of having the opportunity to have the EMA loan forgiven over a period of 5 years after the end of EMA assistance, you will be liable for payment of the full portion of the EMA loan that has been paid to your bank/servicer, including the reinstatement amount and the EMA portion of any monthly mortgage payments made on your behalf.
A. Along with your other settlement documents, you signed an Open-End Deed of Trust and a Note. Only the Open-End Deed of Trust is recorded in Land Records. The EMA loan is based on the understanding that your income may change and your monthly mortgage payment may also change because of changes in required escrow payments for property taxes and insurance. If a change occurs, we may have to adjust the EMA contribution amount up or down to accommodate the change, and this would change the total amount of your loan.
The Open-End Deed of Trust states that your loan cannot exceed $50,000 because that is the maximum amount of any EMA loan. It covers any amounts that have been paid on your behalf and any amounts that are projected to be paid on your behalf in the future. The original projected amount of your loan is identified in the Note as payment of arrearages and advances; the Open-End Deed of Trust includes only the maximum amount of $50,000. The EMA loan and Open-Ended Deed of Trust are not like an open line of credit; the “open-end” means that the amount of the indebtedness will remain open until the end of the EMA assistance period.
A. For reinstatement-only or arrears-only loans, the assistance period ends when the reinstatement amount is paid by DHCD on your behalf using EMA funds. For customers receiving EMA assistance with monthly mortgage payments, the commitment letter shows the initial estimate for the scheduled end of EMA assistance. However, the period of assistance may change due to a number of factors, making it critical that you comply with all EMA requirements as outlined above.
Once the EMA assistance period ends for any reason, the final dollar amount of your EMA loan will be identified and the Note will be assigned to the U.S. Department of Housing and Urban Development (HUD)’s servicing agent. After the assistance period, as long as there is no default on the original mortgage or the EMA loan, the EMA loan will be forgiven at the rate of 20% per year until it reaches zero dollars at the end of five years. The HUD servicing agent will then release the Deed of Trust and the EMA loan will be cleared.
A. The IRS has provided guidelines relating to the impact of EHLP/EMA loans on borrowers at: www.irs.gov/pub/irs-drop/n-11-14.pdf. You should address any tax questions to the IRS or your tax preparer.