Governor Ed Rendell has announced plans to further expand their mortgage relief programs for people who are at risk of foreclosure. The programs that have been in place since the summer time are called, HERO and REAL.

HERO is the Homeowner Equity Recovery Opportunity. It is designed for Pennsylvania residents who have not be able to stay current on their payments, but were placed into exotic mortgages by predatory lending. Created by the Pennsylvania Housing Finance Agency in the summer, this is one of the first state run programs in the country to address the subprime mortgage crisis. These mortgages are backed by PNC Bank and come with a 7.95% interest rate.

REAL is a program that offers mid 7% interest rates to people who have been current with their payments, but also feel that they have been victimized by a predatory lender. The loans are being backed by a consortium of 73 lenders.

The key to either program is that the borrower must show that they were the victim of a predatory lender and because of this they are now facing foreclosure. These programs are not open to just anyone looking for a refinance loan. You must qualify to even qualify for the application process for these loans.

The city of Philadelphia has also stepped up to back these loans with a grant of $1,000,000. The state is also stepping in and selling $200 million is bonds to raise capital for these two programs.