Last-minute help for desperate homeowners

UPDATED, 1:00 p.m. July 25

The Department of Housing and Urban Development has extended the Emergency Homeowners' Loan Program deadline to Wednesday, July 27. For information about the Emergency Homeowners' Loan Program, scroll to bottom

BRISTOL, Conn. -- The housing market continues to be a drag on the economy. A report out today showed sales of previously-occupied homes fell 8/10 of a percent in June, the third monthly loss in a row. One factor holding down the market is the high number of foreclosures.

The federal government set up a lifeline to help thousands keep their homes, but few heard about it. As CBS News correspondent Rebecca Jarvis reports, the time to apply for that help is quickly running out.

When Teresa Acampora lost her sales and marketing job she was determined not to lose her home too. With their income cut by more than half, the Acamporas fell 10 months behind in mortgage payments.

"Bad things happen to very good people," said Acampora. "That can literally throw people into the death spiral of foreclosure."

Moving was a bad option. Their Bristol, Conn. house is customized for her 10-year-old-son Kyle, who has cerebral palsy.

"We were seven to ten days away from foreclosure," she said.

Then Acampora learned about a federal program for homeowners in default. "It was a godsend," she said.

Her godsend is a billion-dollar federal program called the Emergency Homeowners' Loan Program. It's for homeowners who are either unemployed or underemployed and at least 90 days behind on their mortgage. They'd get $50,000 to bring their mortgage payments up to date and help make future payments for two years. Homeowners don't have to pay the government back as long as they do not default.

"It gave us the step up and the step forward so that we can move forward now. It helped us get stabilized [and] get our life back."

The program is supposed to help 30,000 homeowners, but it could fall short of that. Though Congress appropriated the money last July, it wasn't fully launched until last month.

The deadline for applications is Friday.

A HUD spokesperson told CBS News that "unfortunately, the time table is slower than we initially expected."

At Brooklyn Housing and Family Services, Carol Finegan's staff is racing to get qualified people into the program.

"I'm disappointed that I won't be able to find the applicants we need," said Finegan.

Connecticut has had better luck, thanks to an earlier start. Dara Kovel is chief housing officer for the Connecticut Housing Finance Authority - which has received 1,000 applications for the 800 available emergency loans.

"It's not about subprime, not about restructuring a bad mortgage," said Kovel. "It just really helps people who have done everything they can to play by the rules."

Although the program is a bridge for people stuck in this bad job market, it may not be enough for homeowners deep underwater who have big arrears and little income going forward.

There is still money available especially for the following states -- New York, Iowa, Nebraska, Arkansas, Vermont and Utah -- and time left to submit worksheets. Borrowers can visit, e-mail, or call 855-FIND-EHLP (855-346-3345) for more information

For the period from June 20 to July 12, HUD reports there were 263,388 total visits to the Findehlp Web site, and 124,052 downloads of pre-applicant screening worksheets. For the same period, there were 26,840 inbound calls to the 855-FIND-EHLP helpline.