PAWTUCKET – The Housing Network of Rhode Island has received a $375,000 grant from the R.I. Attorney General Peter F. Kilmartin’s Office to bolster mortgage and home buyer education programs, the office announced Thursday.
“Homeowner education and financial literacy are the keys to successful long-term home ownership. Unfortunately, too many people fell underwater with their mortgages because they did not understand the complicated financial contracts to which they originally agreed,” Kilmartin said in prepared statements.
Funded by the National Mortgage Settlement that has already doled out $22 billion to American homeowners, the grant will go toward keeping the Housing Network’s basic home buyer and mortgage literacy certification classes running. The program relies on such grants to cover its operating costs due to funding delays from its largest funding source, the Department of Housing and Urban Development (HUD).
A nonprofit association of community development groups from around the state, the Housing Network’s runs the HUD-approved home buyer certification program that provides “homeowner counseling, home buyer education and outreach.” The classes run for six weeks, and while a $60 cover buys materials, the grant will help keep the program going when just fees won’t suffice.
“These funds will go a long way to support the efforts of the Housing Network members working in communities across Rhode Island in helping individuals purchasing their first home make good choices when it comes to mortgage products,” Chris Hannifan, executive director of the Housing Network, said in a statement. The funds will also support HUD-certified counselors that aid residents in legal and foreclosure prevention.
While the grant is valuable, the contraction of federal support is still causing hardships. “We’ve been trying not to lay people off,” Hannifan told Providence Business news. “I still have eight members running programs with no funding source to pay for it.”
The National Mortgage Settlement resulted from the “largest consumer financial protection settlement in United States history,” the Department of Justice website states, and is funded by a total of $25 billion in payouts from the five largest mortgage lenders: Bank of America Corporation, JPMorgan Chase & Co., Wells Fargo & Company, Citigroup Inc. and Ally Financial Inc. (formerly GMAC).