SACRAMENTO, Calif.--(Keep Your Home California now has 101 mortgage servicers on board with its state-managed mortgage assistance program. More servicers participating means more low to moderate income homeowners can be helped through the mortgage aid program.)--
“Many servicers phase in their participation, and may limit the number of programs they participate in when they initially sign up”
The federally funded $2 billion program helps homeowners who have suffered a financial hardship, such as a job loss, a reduction in pay, divorce or significant health care expenses, to make their mortgage payments. The California Housing Finance Agency-managed program can only help struggling homeowners if their mortgage servicers participate in Keep Your Home California.
“Mortgage servicers are definitely a key to the success of the program,” said Claudia Cappio, Executive Director of the California Housing Finance Agency. “We’re very pleased that so many servicers have joined the program and are willing to take steps to help homeowners, their communities and the state recover from the downturn in the economy.”
Servicers of all sizes have joined the effort, including big banks such as Bank of America, Chase Home Finance, CitiMortgage and Wells Fargo, as well as much smaller credit unions. These servicers cover more than 90 percent of the mortgages in California.
Keep Your Home California was established under the U.S. Treasury’s Hardest Hit Fund and offers four separate programs aimed to prevent avoidable foreclosures to qualifying homeowners who have suffered a financial hardship.
To qualify, homeowners must meet certain criteria such as owning and occupying the home in California, demonstrating delinquency or risk of imminent default, and owing less than $729,750 on their first mortgage. The programs were designed for low to moderate income households so homeowners must also meet county-by-county income requirements, available at http://www.keepyourhomecalifornia.org/files/income.pdf
A brief look at the four programs:
- Unemployment Mortgage Assistance Program: Homeowners can receive as much as $3,000 per month in mortgage assistance for up to nine months. Homeowners must be currently receiving or approved to receive jobless benefits from the state Employment Development Department. Also, if homeowners find a job during the nine-month period, they are no longer eligible for the program. All of the 101 mortgage servicers in Keep Your Home California participate in the Unemployment Mortgage Assistance Program.
- Mortgage Reinstatement Assistance Program: Homeowners can receive as much as $25,000 in assistance to help them “catch up” on their past-due mortgage payments. Homeowners must have suffered a financial hardship and be able to make the mortgage payments going forward. One hundred of the mortgage servicers currently participate in this program.
- Principal Reduction Program: Homeowners can get as much as $100,000 in principal reduction from Keep Your Home California. To qualify, the homeowner must have suffered a financial hardship, but be able to make the mortgage payments in the future. Also, the current market value of the home must be less than what is owed on the mortgage, or “underwater.” Fifty-one of the participating mortgage servicers, including Bank of America, Chase, GMAC and Wells Fargo, participate in the Principal Reduction Program.
- Transition Assistance Program: Homeowners can collect as much as $5,000 to cover relocation costs as part of a servicer-approved short sale or deed-in-lieu of foreclosure of their home. More than half of the 101 servicers participate in the Transition Assistance Program.
Thirty-nine servicers participate in all four programs and two-thirds of the 101 mortgage servicers participate in at least three of the four programs.
“Many servicers phase in their participation, and may limit the number of programs they participate in when they initially sign up,” said Ms. Cappio. “As servicers gain experience and are able to make needed changes to their systems, we have seen their participation expand. While most lenders start with the unemployment program, the number of servicers participating in the Principal Reduction Program has grown from 12 to 51 servicers since June.”
To date, Keep Your Home California has helped more than 20,000 homeowners with nearly $250 million since the program started in February 2011. Funds have also been reserved for another 10,000 homeowners pending final eligibility determination.
Homeowners seeking more information about the program should call 888.954.KEEP (5337) between 7 a.m. and 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. The Keep Your Home California counseling center can answer questions in virtually any language – all for free. A comprehensive website is available at www.KeepYourHomeCalifornia.org (or www.ConservaTuCasaCalifornia.org).