Transition Assistance Program offers $5,000 to families looking for a fresh start

Keep Your Home California officials are always looking to improve the free mortgage-assistance program for hard-hit homeowners. The program has undergone many changes since starting in February 2011. This is the final of four posts that detail many of these program changes – and how they help homeowners.

From assisting out-of work homeowners to those struggling with significantly underwater mortgages, Keep Your Home California focuses on helping Californians prevent avoidable foreclosures, oftentimes helping them stay in their homes in the process.

But the mortgage-assistance program also helps homeowners who, through no fault of their own, are faced with the hard-to-grasp reality of losing their house.

ID-10052201The Transition Assistance Program offers as much as $5,000 to help low- to moderate-income homeowners move to another form of housing — enough money for covering moving costs, a security deposit and in some cases a few months of rent. Basically, the dollars give families a fresh start in a new home.

The Transition Assistance Program was established to be used in conjunction with a mortgage servicer-approved short sale or deed-in-lieu of foreclosure to help homeowners make the move into a new housing situation as easy as possible, whether it’s an apartment, rental house or moving in with relatives.

Of course, there are some requirements, just like the other three programs in Keep Your Home California.

Most notably, the income limit – 120% of the county’s area median income.,. Before you decide that you earn too much, the income limits range from about $69,000 in several rural counties to more than $120,000 in San Francisco and San Mateo counties. You can check the complete county-by-county income limits here (URL to http://keepyourhomecalifornia.org/income-limits/).

Your mortgage servicer – the lender that collects the monthly mortgage payments – must also participate in the Transition Assistance Program. Almost 130 mortgage servicers are enrolled in the program, six times as many as two years ago. Wells Fargo, Bank of America, Bank of the West, Chase Home Finance, and CitiMortgage are among the big-name banks that participate in the Transition Assistance Program. Check the complete list of mortgage servicers enrolled in the program. (URL to http://keepyourhomecalifornia.org/participating-servicers/)

Image courtesy of Vichaya Kiatying-Angsulee / FreeDigitalPhotos.net


Keep Your Home California expands Principal Reduction Program to help some homeowners with underwater mortgages

Homeowners flailing financially with severely underwater mortgages could receive a much-needed life vest – possibly as much as $100,000 in principal reduction from Keep Your Home California

The state-managed program will now consider homeowners with a loan-to-value ratio of 140% or greater as suffering a financial hardship, making them eligible for Keep Your Home California. It’s the latest change to the Principal Reduction Program, which has been expanded several times to help more homeowners since the program started in February 2011.

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The $2 billion, federally funded program made the change after determining that there are still thousands of homeowners, especially in some of the hardest-hit housing regions such as the Central Valley and the Inland Empire, with loan-to-value ratios of 140% or higher. These homeowners have been sitting on the sidelines, hoping for some help with their severe negative equity.  Under the recent change, the free mortgage-assistance program will help low and moderate income homeowners reduce their loan-to-value ratio to possibly 105%. For example, a homeowner who owes $280,000 on a home with a $200,000 value could have his principal reduced to $210,000.

Of course, homeowners must meet county-by-county income requirements (a complete list is available at http://keepyourhomecalifornia.org/income-limits/) and their mortgage servicer must participate in the program.

Currently, more than 100 of the 160 mortgage servicers – including Bank of America and Wells Fargo Bank – participate in the Principal Reduction Program. These servicers manage a large majority of homeowners’ mortgages in California. Check the complete list of mortgage servicers participating at http://keepyourhomecalifornia.org/participating-servicers/.

And homeowners using the Principal Reduction Program must remain in their home for at least five years. If the homeowner sells prior to that date, they may be required to pay back the assistance from the proceeds of the sale of the home if there is enough equity.

The 140% or greater loan-to-value ratio only affects the Principal Reduction Program. The other three programs require more traditional financial hardships, such as a job loss, cut in pay, a divorce or extraordinary medical bills.

Keep Your Home California has helped more than 32,000 homeowners since February 2011.

If you have additional questions or would like to apply for the program, call 888-954-5337 or visit www.keepyourhomecalifornia.org (Spanish speakers should visit www.conservatucasacalifornia.org). The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays.

Image courtesy of Renjith Krishnan at FreeDigitalPhotos.net.


Servicer Scorecard allows homeowners to check data on mortgage servicer participation in Keep Your Home California

Which mortgage servicer approves the largest percentage of applications to Keep Your Home California?

How many days does it take for a response to an application from a specific servicer? Who refers the most homeowners to the free mortgage-assistance program?

Answers to these questions, and several more, are part of the Servicer Scorecards, a just-released tool for homeowners at www.KeepYourHomeCalifornia.org.

The data allows homeowners to determine how much their mortgage servicer participates in the $2 billion program.

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Keep Your Home California – designed for financially strapped homeowners needing help with their mortgage – will rate the 140-plus mortgage servicers enrolled in the program on a monthly basis.  From the big-name banks such as Bank of America and Wells Fargo to the smaller credit unions, as long as a servicer completed at least one transaction during the month, they will be included on the scorecard.

 Each servicer participating in at least one of the four programs is assessed on numerous categories, including the percentage of applications approved (and declined), how many days it takes to respond to applications and the total funding issued per program.   

The scorecards will also indicate how homeowners are hearing about Keep Your Home California, and if servicers are referring borrowers to the program. (Servicer referrals are one of the most effective ways homeowners hear about Keep Your Home California.)

The top 15 servicers with the most transactions – including Bank of America, Chase, US Bank and Wells Fargo – will have more detailed information in easy-to-view graphics.  This visual comparison gives homeowners a quick and effective way to see how the most active servicers are participating in Keep Your Home California.

For example, Wells Fargo funded 1,752 transactions in July, the most among all servicers. Bank of America issued $7.87 million funding during that month, about $2 million more than second-place Wells Fargo.

Bank of America and Wells Fargo accounted for more than 40% of the funding issued through the program in July.

Wells Fargo also had the largest number of referrals to the program– based on mailers, events or representatives – at 641, while Chase finished second with 444.

So, check out the Servicer Scorecards and see how your mortgage servicer is participating in the program.

Keep Your Home California has helped more than 29,000 homeowners since February 2011. Homeowners must meet county-by-county income requirements and their mortgage servicer must participate in at least one of the four programs. Homeowners must also face a financial hardship, such as a job loss, cut in pay, a divorce or extraordinary medical bills in order to qualify.

If you have additional questions or would like to apply for the program, call 888-954-5337 or visit www.keepyourhomecalifornia.org (Spanish speakers should visit www.conservatucasacalifornia.org). The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays.

 

 

 

 

 

 


U.S. Treasury Blog: Changes to California’s Principal Reduction Program Attract More Mortgage Servicers

Originally posted on the US Treasury Blog

By: Claudia Cappio, Executive Director of the California Housing Finance Agency.

In the wake of the housing crisis and economic downturn, many people are in need of mortgage assistance. And one of the best ways to help financially strapped, underwater homeowners may be through a mortgage loan principal reduction.

By curbing mortgage debt and lowering monthly payments, homeowners are able to stay in their homes and breathe a bit easier. Principal reduction is an important component of the mortgage assistance offered through the Hardest Hit Fund, which provides $7.6 billion to Housing Finance Agencies in 18 states and the District of Columbia to establish programs to help homeowners with their mortgage payments and avoid foreclosure.

The U.S. Department of the Treasury committed almost $2 billion in Hardest Hit funding for Keep Your Home California, administered by the California Housing Finance Agency. Four programs were established, each with specific goals and requirements, to help homeowners who have suffered a financial hardship through no fault of their own, such as a job loss, cut in pay, divorce or extraordinary medical expenses in the Golden State.

One of California’s programs allows out-of-work homeowners collecting jobless benefits to have their mortgage payments covered, as much as $3,000 per month for up to nine months while they look for work. Another program has provided homeowners with an average of $13,000 to “catch up” on their mortgage payments to avoid foreclosure. For homeowners who undergo a short sale or deed-in-lieu of foreclosure, a transition assistance program helps initiate a graceful exit from the home.

And because nearly 30 percent of all homeowners in California are underwater on their mortgage, meaning they owe more on their mortgage than the current value of their home, the Principal Reduction Program has been one of the most significant foundations of the four Keep Your Home California programs.

With the Principal Reduction Program, eligible homeowners – those who meet low or moderate area income limits, have suffered a financial hardship and owe more than their home is worth – can receive a reduction in their principal balance to get them to a loan-to-value ratio of 105 percent to 140 percent. Based on the most recently completed quarterly report, homeowners who qualified for California’s Principal Reduction Program saw the median principal balance on their mortgage drop an average of 30 percent, or from $320,000 to $223,000. The reduction in principal balance translates to a more affordable monthly payment for homeowners.

For example, homeowner Sharon P.’s monthly mortgage payment went from about $1,000 to less than $500 with the Principal Reduction Program, a big relief after suffering a layoff from her job and now living off of one income. There are literally more than 1,000 similar stories under the Principal Reduction Program, and nearly 25,000 statewide, from homeowners who have now been assisted through one or more Keep Your Home California programs.

Certainly, the cost savings are a huge benefit for the homeowner, but it’s also an economic boost for the community. Fewer homes enter foreclosure and sit empty, fellow homeowners enjoy more stable home prices, and nearby business owners have more people buying clothes, groceries and gasoline.

Keep Your Home California, including the Principal Reduction Program, debuted in February 2011. Several changes have been made during the past two years to increase accessibility to the program for struggling homeowners. One of these changes involved Keep Your Home California officials eliminating the dollar-for-dollar match for servicers, and taking on the full financial responsibility of the principal reduction.

Here’s how it works: mortgage servicers – the companies that collect your mortgage payments –need to approve the principal reduction application. From there, mortgage servicers modify or recast the loan with the new principal amount, creating a more affordable and sustainable mortgage for the homeowner.

The results have been astounding: Keep Your Home California now has almost 60 mortgage servicers participating in the Principal Reduction Program, including Bank of America, JPMorgan Chase and Wells Fargo. More servicers on board means more homeowners are now applying and being approved for the program – a 47 percent increase in fourth-quarter 2012 compared to one year ago.

It was an aggressive, out-of-the-box idea that yielded positive results. Many of the other Housing Finance Agencies in the Hardest Hit Fund have also made changes, fine-tuning and tweaking their programs in order to help more homeowners.

Because, across the United States, from California to Rhode Island, and from Michigan to Florida, all 19 Housing Finance Agencies have one overriding goal – to help homeowners keep their homes. And, fortunately, every single day, we are doing exactly that.

Claudia Cappio is Executive Director of the California Housing Finance Agency, which oversees Keep Your Home California.


101 SERVICERS PARTICIPATING IN KEEP YOUR HOME CALIFORNIA

Keep Your Home California has reached the century mark, well, actually, the 101 mark.ID-10075420

Keep Your Home California now has 101 mortgage servicers participating in the federally funded, state-run program.

The big-name banks – Bank of America, Chase Home Finance, CitiMortgage, GMAC and Wells Fargo – are on board. So are many midsize and small banks as well as credit unions. These mortgage servicers handle more than 90% of the mortgages in the state.

The participation of servicers – the companies that handle your mortgage – is critical to helping homeowners with their payments and to the success of the $2 billion Keep Your Home California program. Basically, we need all servicers to participate in the program, since they have to be participating so we can help homeowners with their mortgages. (You can check the complete list of servicers at www.KeepYourHomeCalifornia.org/participating.htm.)

Keep Your Home California has four programs – servicers determine which ones they want to participate in. Currently, 39 servicers participate in all four programs, while about two-thirds are enrolled in at least three of the four programs.

All of the participating servicers are enrolled in the Unemployment Mortgage Assistance program, which offers as much as $3,000 per month for up to nine months – a maximum of $27,000. Homeowners must be approved to receive jobless benefits from the state Employment Development Department.

The other programs are the Mortgage Reinstatement Assistance Program, which offers as much as $25,000 to catch up on payments; the Principal Reduction Program, with a maximum of $100,000 to help those eligible homeowners whose mortgage is underwater, and the Transition Assistance Program, providing up to $5,000 to homeowners who are undergoing a short sale or deed-in-lieu of foreclosure.

Homeowners can combine these programs. For example, if you’re an eligible, out-of-work homeowner, you can get your mortgage covered by the Unemployment Mortgage Assistance program. Then, after you’ve found a job and are back on your financial feet, you could apply for the Mortgage Reinstatement Assistance or Principal Reduction programs. Eligible homeowners can collect as much as $100,000 per household in mortgage assistance from Keep Your Home California.

Keep Your Home California was established under the U.S. Treasury’s Hardest-Hit Fund with the goal of helping homeowners who have suffered a financial hardship, such as a job loss, reduction in pay, divorce or significant health care expenses.

So far, Keep Your Home California has helped about 21,000 homeowners with more than $250 million since the program started in February 2011. Funds have also been reserved for another 10,000 homeowners pending final eligibility determination.

If you would like more information about Keep Your Home California, check www.KeepYourHomeCalifornia.org (or www.ConservaTuCasaCalifornia.org in Spanish) or call 888-954-5337. The processing center is open 7 a.m. to 7 p.m. weekdays, and 9 a.m. to 3 p.m. Saturdays. Calls can be accommodated in virtually any language.

Image courtesy of Sujin Jetkasettakorn / FreeDigitalPhotos.net


Keep Your Home California Program Attracts 20 More Servicers to Program

Mortgage servicers catering to everything from professional musicians to employees for the King of Beers are joining Keep Your Home California.

In fact, the state-run mortgage assistance program has added 20 servicers during the past four months (see below for the list) – about a 30% increase since March 1. Currently, there are about 85 servicers participating in the program, from financial-services giant Bank of America to Musicians Interguild Credit Union in Hollywood and the Anheuser Busch Employee Credit Union.

From the big-name banks – think Chase and Wells Fargo – to the more pint-sized, such as Bourns Employee Federal Credit Union and Napus Federal Credit Union, participating servicers make the program work.

We want to help homeowners – it’s our primary mission. But your servicer, the company that collects your monthly payments, must participate in Keep Your Home California and at least one of the four programs. Check the complete list of servicers at http://www.keepyourhomecalifornia.org/participating.htm.

We continue to attract servicers, especially following the recent decision to eliminate a dollar-for-dollar match by servicers participating in the Principal Reduction Program http://www.keepyourhomecalifornia.org/prp.htm. Basically, homeowners could receive as much as $100,000 in principal reduction from Keep Your Home California, without funds from servicers.

Now, we are looking at additional changes that could lure more servicers to the Principal Reduction Program. Hopefully, the big banks, Fannie Mae and Freddie Mac will embrace the program, making it much easier for everyone – Keep Your Home California, the servicers and, most importantly, homeowners. (Fannie Mae and Freddie Mac combine to have a role in about 60 percent of the mortgages in the state.)

And we constantly look at our other three programs – Unemployment Mortgage Assistance, Mortgage Reinstatement Assistance and Transition Assistance – in order to improve efforts for hard-hit homeowners and servicers. For example, we increased the funding limit under the Mortgage Reinstatement Assistance Program to $25,000 in recent months.

Keep Your Home California representatives continue to meet with mortgage servicers encouraging them to join or expand their participation in the federally funded program. We’ve had good luck, but if your servicer is not participating or enrolled in a specific program, well, it doesn’t matter how many we have on board for you.

So, we will do our best to get every servicer to participate. Here are the most recent additions to the program. We strongly encourage you to check out the website for the complete list and how these 20 newcomers are participating in the program.

  • Acqura Loan Services
  • AMS Servicing
  • Anheuser Busch Employee Credit Union
  • Bourns Employee Federal Credit Union
  • Carrington Mortgage Servicing LLC
  • CCO Mortgage (aka RBS Citizens Bank)
  • FCI Lender Services Inc
  • Fremont Bank
  • Home Servicing
  • Honda Federal Credit Union
  • MetLife Home Loans
  • Musicians Interguild Credit Union
  • Napus Federal Credit Union
  • Pentagon Federal Credit Union
  • Resurgent Mortgage Servicing
  • Round Point Mortgage Servicing
  • RPM Mortgage
  • San Diego County Credit Union
  • San Joaquin Power Employees Credit Union
  • Western Federal Credit Union

If you would like more information about Keep Your Home California, check http://www.keepyourhomecalifornia.org/ (or http://www.conservatucasacalifornia.org/ in Spanish) or call 888-954-5337. The processing center is open 7 a.m. to 7 p.m. weekdays, and 9 a.m. to 3 p.m. Saturdays.


Four questions could open the door to thousands of dollars in mortgage assistance

'268/365 - Default State' photo (c) 2009, Helga Weber - license: http://creativecommons.org/licenses/by-nd/2.0/Four easy-to-answer questions will determine if Keep Your Home California could work for you. And we’re not talking about fingers-and-toes counting, mind-numbing questions.

Do you own and occupy your home as your primary residence? Is your home in California? Is the current amount you owe on your first mortgage equal to or less than $729,750? Check the complete list – and the fourth and final question — at www.KeepYourHomeCalifornia.org/qualify.aspx.

Rather easy questions, huh? But how you answer could determine if you are eligible for Keep Your Home California, a state-run program with $2 billion from the U.S. Treasury’s Hardest Hit Fund.

Now, the four questions are just the beginning of the process, but a huge step. After answering the questions and getting the thumbs up, check if your mortgage servicer – such as Bank of America, Chase Bank or Wells Fargo — is participating in the program at http://www.keepyourhomecalifornia.org/participating.htm.

We can’t stress this enough, your mortgage servicer must be on the list. But if your mortgage servicer isn’t participating, don’t be discouraged, just check back in a few weeks. We add mortgage servicers to the program almost every week. We have more than 50 participating servicers that cover about 90% of the mortgages held by California homeowners, a dramatic increase from when the program launched in February.

If your mortgage servicer is on the list, then we urge you to call the counseling center at 888-954-5337. A counselor will discuss the available mortgage assistance programs and learn more about your situation. Each homeowner and situation is different. In fact, some homeowners could be eligible for multiple programs and more assistance.

You can learn more about Keep Your Home California and the four programs at http://www.keepyourhomecalifornia.org/. We also encourage you to check the frequently asked questions page, which offers more details on Keep Your Home California.

Of course, just as when you bought your home, there is some paperwork involved, including financial information, with the program. But a representative will go over the details and the documents required.

Answering the four questions is just the beginning, but it opens the door to Keep Your Home California – and possibly save your home.

And you are not alone. More than 11,000 homeowners have benefited or are in the pipeline to receive funds from the state-run program, which will help about 90,000 families during the next several years.


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