Where Do The Dollars for Keep Your Home California Come From?Posted: August 29, 2011
The U.S. Treasury Department, as part of the rescue of the financial system in 2008, set aside funds to help homeowners in 18 states – including California – hardest hit by the foreclosure crisis. The California Housing Finance Agency, after consulting with community leaders statewide, established the four programs of Keep Your Home California.
The state-run program has almost $2 billion and a clearly defined goal – keep homeowners facing foreclosure in their homes, whenever possible (as if our name wasn’t enough of a giveaway, huh?).
State officials established the four programs to meet that goal, from helping the behind-in-payments homeowner to those who need some money after a short sale. Two other programs also are available, assisting unemployed homeowners struggling to pay their bills and a principal-reduction program for homeowners with much-lower home values (many owe more than the value of their home).
Keep Your Home California has earmarked $875 million to Unemployment Mortgage Assistance, the largest of the four programs. The Principal Reduction program is the second largest at $790 million, followed by the Mortgage Reinstatement program at $129 million. The remaining dollars are earmarked to help homeowners relocate after a short sale; as long as the loan service approves the plan (next week’s blog will provide more details on the four programs).
The federal funds, part of a $75 billion effort by the Obama administration to help troubled borrowers, also benefits the state and its residents, even those who are current on their mortgage.
The program helps the still-struggling state in numerous ways. Foreclosed homes are bad for business, the economy and neighborhoods, just ask anyone who lives next to a long-empty home.
“Foreclosures create a huge problem for the city, and I think the program will be beneficial in keeping people in their homes,” Signal Hill redevelopment manager Elise McCaleb recently told the Signal Tribune in Southern California.
And California has far too many people losing their homes. The Golden State has been one of the hardest-hit housing markets, rivaling Arizona, Florida and Nevada. The state has averaged more than 15,000 homes entering foreclosure every month during the past two years, according to industry trackers.
So, if you are facing foreclosure, you’re far from alone.
That’s why we encourage homeowners to call 888-954-KEEP or click http://www.keepyourhomecalifornia.org/ to get more information and see if they qualify.