HARRISBURG, February 15, 2012 — State Senate Democrats today called on the state Attorney General to earmark a significant portion of funds from the national $25 billion settlement with the nations largest mortgage servicers to fund a state program to prevent foreclosures.

The Democrats made the request in a letter to Attorney General Linda Kelly.

The money coming to Pennsylvanias government from the national settlement should be used to halt foreclosures, said state Senator Wayne Fontana (D-Allegheny), ranking Democrat on the Senate Community and Economic Development Committee. These monies should be used to address housing issues and stabilize communities.

The settlement funds due Pennsylvania are the result of an investigation of mortgage and foreclosure abuses by state Attorney Generals and bank regulators from across the United States.

Pennsylvania is slated to receive approximately $266 million for loan modifications, cash payments to borrowers, refinancing loans for homeowners who are underwater and a $69 million direct payment to the Office of Attorney General.

State Senator LeAnna Washington (D-Philadelphia/Montgomery) who has sponsored legislation to fund HEMAP (Homeowners Mortgage Assistance Program) with table games revenue and has been a strong advocate of housing assistance over her years in public service, said she is concerned that without specific instructions on allowable uses of the money, the funding might be redirected to Gov. Tom Corbetts cash-starved General Fund or put in reserve and not used at all.

Our letter asks Attorney General Kelly for her commitment that a portion of the funds will be used to help homeowners stay in their homes; and we further ask that she work with Senate Democrats on this issue to help prepare directions on the use of these funds, Washington said.

In the letter to Kelly, signed by all Senate Democrats, the lawmakers said that before the dollars coming to Pennsylvania are earmarked for other reasons, we believe and strongly request that a significant portion of the funds should be utilized to reestablish HEMAP.

A victim of state budget cuts, HEMAP was closed down on July 1, 2011.

The HEMAP program has a long track record of helping homeowners avoid foreclosure, Fontana said. Just as important, it has been a key to stabilizing communities.

From 2008 through 2010, HEMAP helped 6,162 homeowners stay in their homes.

For a very low cost and using these new resources, we can jump-start HEMAP, keep families in their homes and help communities, Washington said.

In the 2008-10 period, the state invested approximately $38 million in the program. Since HEMAPs beginning in 1983, the program has helped 46,000 families. It has been 85 percent successful in saving homes and solidifying communities and it has served as a national model.

Washington said Pennsylvania direly needs to restart the program. In December alone, there were 3,727 homes were foreclosed on in Pennsylvania, according to RealTrac.