Emergency home loans approved by City Council panel

Several dozen Seattle homeowners facing foreclosure could receive emergency loans under a new program approved by a City Council committee Wednesday.

The program would provide one-time, zero-interest loans of up to $5,000 to eligible, working homeowners who have defaulted on their mortgages. The money, paid directly to mortgage lenders through nonprofit groups, would be intended to help the homeowner catch up on their debt -- either to protect their mortgage or to give them time to sell the house on their own terms.

"It looks like it's well thought out," said Councilman Bruce Harrell. "This is a crisis we're all facing as a country. So, Seattle must do its part."

The committee approved the pilot program by a vote of 3-0. The full council is expected to consider it Monday.

The $210,000 program would give loans to about 40 households. To qualify, homeowners must earn no more than 80 percent of the city's average median income. That's about $48,000 for a family of two and up to $60,000 for a family of four.

During the first several months of 2008, the number of foreclosures in the Seattle/Bellevue/Everett region was 41 percent higher than during the same period of time last year, city officials said.

The loans would be repaid the next time the house is sold or refinanced. Officials acknowledged a risk that the loans will not be repaid if the house is ultimately seized under foreclosure. The city would be a junior lien-holder, and some homes are selling at a loss these days.

IF YOU NEED HELP

Homeowners in need of assistance should contact Solid Ground or the Urban League directly to see if they qualify:

Urban League: 800-368-1455;

Solid Ground Mortgage Hotline: 206-694-6766.