Pennsylvania homeowners facing foreclosure due to the subprime mortgage crisis or mortgage fraud can turn to two new state programs for help.

Gov. Ed Rendell announced Monday that the state has created the programs to assist homeowners who suddenly are facing sharply higher monthly payments beyond their means, through no fault of their own.

These new programs, dubbed HERO and REAL, replace the unaffordable loans with long-term, fixed-rate mortgages at affordable terms through the Pennsylvania Housing Finance Agency.

The new programs come days after a federal judge ordered victims of the Personal Financial Management mortgage scam to either continue paying their old mortgage or pay 75 percent of their new higher mortgage, whichever is greater.

That mortgage scam, affecting 300 Lancaster County families, secretly saddled borrowers with much costlier and longer loans.

REAL (Refinance to an Affordable Loan) offers 100 percent refinancing to homeowners whose adjustable-rate, interest-only or exotic mortgages have soared in cost.

REAL is limited to borrowers whose gross household income is no more than $120,000, who are no more than 59 days past due on their existing mortgage and meet other conditions.

Seventy-two lenders statewide have agreed to participate in the program through PHFA, offering REAL loans at 7.375 to 7.625 percent.

For homeowners who don't qualify for REAL, there's the HERO (Homeowners' Equity Recovery Opportunity) program.

It too allows homeowners to borrow up to 100 percent of their home's value.

But instead of providing refinancing by issuing a new loan, under HERO the state agency will buy your loan from your lender, then set up a repayment plan at 7.95 percent.

Credit counseling and financial management education also are part of the two programs, which are being launched with the help of PNC Bank and the city of Philadelphia.

For more information, visit www.pfha.org or call toll-free at (800) 822-1174.

CONTACT US: tmekeel@LNPnews.com or 481-6030