Sometimes change is good, especially when it provides as much as $100,000 in principal reduction for underwater homeowners

 

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. The next four blog posts will detail many of these program changes – and how they help homeowners.

California’s housing market continues to improve, with double-digit price increases every month for the past 24 months (as of February 2014).

Despite the dramatic gains, many homeowners are still upside down or “underwater” on their existing mortgage, meaning they owe more than their home is worth. In fact, according to a recent CoreLogic report, nearly one out of every eight California homeowners with an existing mortgage owes more than the value of their home. In some regions, such as the Central Valley and Inland Empire, the percentage of homeowners with underwater mortgages is much higher.

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Keep Your Home California – a federally funded, state managed program – could help homeowners reduce their principal by as much as $100,000. The assistance provided through the Principal Reduction Program can get homeowners closer to being right-side-up on their mortgage. An improving economy and housing market could do the rest to return homeowners to a positive equity situation.

Since it started in February 2011, the Principal Reduction Program has undergone many changes with the goal of helping more homeowners who are struggling with their underwater mortgages.

For example, a dollar-for-dollar match requirement from mortgage servicers was eliminated in late 2012. This change was made to attract more mortgage servicers – mission accomplished (see below) – and make more homeowners eligible for the program.

In November, Keep Your Home California officials made another major change – a loan-to-value ratio of 140% or greater qualifies as a financial hardship, opening the door for more homeowners to apply for the Principal Reduction Program.

It’s a big change since homeowners must demonstrate a financial hardship in order to qualify for any of the four Keep Your Home California programs. Other types of qualifying financial hardships include a job loss, a decrease in income, a divorce, extraordinary medical expenses, etc.

These changes have allowed the free program to assist many more homeowners. Keep Your Home California approved 1,619 homeowners for the Principal Reduction Program in 2013, a huge increase from the 940 homeowners during the previous two years, combined. The $158.4 million in total Principal Reduction Program funds that were provided by the end of 2013, represented a 384.1 percent increase from the end of 2012.

Homeowners are also being approved faster – about 70 days during the fourth quarter, compared to 110 days since the program started. The average homeowner approved for the program received $77,000 in principal reduction – and enjoyed a 23 percent drop in their monthly mortgage payment, saving about $360 per month.

There are some additional requirements to qualify, including meeting the county-by-county income limits – from about $69,000 to $126,000 – and the homeowner’s mortgage servicer must participate in the program.

Currently, about 120 mortgage servicers – including Wells Fargo, Bank of America, Chase and Citibank – are enrolled in the Principal Reduction Program. In comparison, only 11 servicers participated in the principal reduction effort in December 2011.Change has been good for Keep Your Home California – and the thousands of homeowners who have benefited from the mortgage-assistance program. And officials will continue to look at new ways to improve the program.

If you have additional questions, would like more information or want to apply for the program, call 888-954-KEEP (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.  Translators are available, so counseling sessions can be conducted in virtually any language.

Image courtesy of ddpavumba / FreeDigitalPhotos.net


Best Way to Celebrate a Birthday? Help Homeowners

Keep Your Home California recently celebrated its third-year anniversary with little fanfare – no balloons, cake, candles, clowns or miniature ponies.

Instead, the free mortgage-assistance program’s employees focused on helping more homeowners, just like the previous 900-plus days of operation.

Why? Well, there are still more financially strapped homeowners in California who need the federally funded program.

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Keep Your Home California helps homeowners with their mortgage payments, many who are – or were – facing a foreclosure. The program has also cut many homeowners’ mortgage principal, often reducing their monthly payment and the overall money owed.

The state-managed program has assisted more than 37,000 homeowners since it started in February 2011. Keep Your Home California has approved more than $610 million in funding, and has reserved an additional $400 million for homeowners who are still in process, for a total of about $1.1 billion.

And more than 175 mortgage servicers – including Bank of America, Wells Fargo, Chase and Citibank – now participate in at least one of the four programs, a dramatic increase from the less than 10 servicers that were enrolled when Keep Your Home California launched. In fact, 140 are enrolled in at least three of the four programs today.

So, just like a 3-year-old toddler, Keep Your Home California has enjoyed tremendous growth, thanks to committed employees, dedicated housing counselors and partnerships with servicers – and some changes to the four programs.

For example, the Unemployment Mortgage Assistance Program, the most utilized program thus far, has been expanded from six months to 12 months since the program started. Out-of-work homeowners can receive as much as $3,000 per month for up to one year while they look for work.

The Principal Reduction Program has also expanded, from $50,000 to $100,000 in funding from Keep Your Home California. In addition, homeowners with loan-to-value ratios of 140% or greater on their mortgage will meet hardship criteria for the program, since a severe underwater mortgage is considered a financial hardship.  Homeowners must be able to demonstrate a financial hardship in order to qualify for any of the Keep Your Home California programs.

There have been other changes to the program, which this blog will detail in the coming weeks.

But, for now, the program wants to celebrate its third anniversary the best way possible – encourage more homeowners to apply for financial assistance and help them through such a difficult period.

If you have additional questions, would like more information or want 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.  Translators are available, so counseling sessions can be conducted in virtually any language.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

 


Mario Lopez, a new website and record funding highlight Keep Your Home California program in 2013

Keep Your Home California enjoyed a banner year in 2013, with the introduction of a spokesman and a new interactive website — and a record of funds issued by the free mortgage-assistance program.

The state-funded program introduced Mario Lopez as a bilingual spokesman, with ads featuring the Extra host talking about Keep Your Home California on TV and in radio spots. A new round of commercials should appear during the next several weeks.

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Also, Keep Your Home California debuted a new website that allowed homeowners to answer 12 questions to determine if they should apply for the program. The new, easier-to-use website includes homeowner Success Stories and reports and statistics about Keep Your Home California, including county-by-county and program-specific data.

The program also greatly increased its outreach to homeowners and mortgage servicers in 2013. Keep Your Home California added 67 participating servicers last year, with the overall total topping 160 servicers.

And Keep Your Home California representatives attended 142 community events to educate homeowners about the program during the year – or basically about one every two workdays.

The above efforts are all about connecting with homeowners and encouraging more people to apply for the program.

It definitely worked.

Keep Your Home California approved 13,688 homeowners for the program with combined funding of more than $307.3 million in 2013, a dramatic increase from the $201.7 million in 2012.

Much of the boom in funding is connected to the Principal Reduction Program, which increased from $30.3 million in 2012 to more than $125.6 million last year.  Keep Your Home California approved 2,101 homeowners for principal reduction last year, almost four times more than the 563 homeowners in 2012.

The head-turning increase is attributed to some recent changes in the Principal Reduction Program, including a change to program criteria in November, which specified that an underwater mortgage with a 140% or greater loan-to-value ratio was considered a financial hardship.  Homeowners must be able to demonstrate a financial hardship to qualify for each of the four assistance programs, so making this change to the Principal Reduction Program opened the door to a lot more people.

The Principal Reduction Program provides as much as $100,000 in mortgage assistance, a huge benefit for homeowners looking to lower their monthly payments and/or outstanding principal.

The Unemployment Mortgage Assistance program also had an increase in funding, with more than $152 million issued to homeowners last year, compared to $143 million in 2012. The program was expanded from nine months to 12 months in 2013.

About 1.54 million Californians were collecting jobless benefits in November, 233,000 fewer than a year earlier, according to the latest Employment Development Department report. Homeowners applying for the Unemployment Mortgage Assistance program must be eligible for jobless benefits.

The program provides as much as $3,000 per month for up to 12 months. Of course, if homeowners find jobs, they are removed from the program.

The Mortgage Reinstatement Assistance Program, which offers as much as $25,000 to help homeowners catch up on their mortgage payments, increased last year to $28.3 million, from $27.8 million in 2012. Keep Your Home California approved 2,066 homeowners last year for the program, down slightly from the 2,111 in 2012.

And the Transition Assistance Program, which gives as much as $5,000 to a homeowner with an approved short sale or deed-in-lieu of foreclosure to start over with a new living situation, helped 367 families last year – almost 300 more than 2012. The program issued about $1.34 million last year, compared to $335,000 in 2012.

So, as you can see, last year was a huge success for Keep Your Home California. But program officials have even loftier goals for helping homeowners prevent avoidable foreclosures in 2014.

If you have additional questions or would like to apply for any Keep Your Home California 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.


California homeowners who recently lost their federal extension benefits could receive as much as $3,000 in mortgage assistance from Keep Your Home California

Unemployed Californians who recently lost their federal extension benefits could get much-needed financial assistance for their mortgage payments.

Keep Your Home California can approve out-of-work homeowners with as much as $3,000 per month for up to 12 months through its Unemployment Mortgage Assistance program. The free mortgage-assistance program, one of four programs offered through Keep Your Home California, allows homeowners to look for work and not worry about their monthly mortgage payment.

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However, homeowners must apply as soon as possible – within one month of losing their unemployment benefits. About 222,000 Californians lost their federal extension benefits December 28.

Keep Your Home California has approved more than 25,000 homeowners and funded about $320 million through the Unemployment Mortgage Assistance program since February 2011 – and more than $500 million combined from all four programs.

Of course, homeowners must meet county-by-county income requirements and meet other Keep Your Home California eligibility criteria in order to qualify for the assistance. Additionally, their mortgage servicer must participate in the program.

There are currently 165 servicers – including banking giants Bank of America, Chase, Citi and Wells Fargo – who are enrolled with Keep Your Home California and every one of them participates in the Unemployment Mortgage Assistance program.

For other struggling homeowners, Keep Your Home California also has a Principal Reduction Program that can lower a homeowner’s outstanding loan balance by as much as $100,000. Another option, the Mortgage Reinstate Assistance Program, provides homeowners with up to $25,000 to catch up on their past-due mortgage payments. And, for homeowners who have simply run out of options, the Transition Assistance Program helps make a graceful exit from homeownership with up to $5,000 in transition assistance.

If you have additional questions or would like to apply for any Keep Your Home California 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 / FreeDigitalPhotos.net


Housing market on the road to recovery, but it’s still a bumpy path for many homeowners

California’s hard-hit housing market is finally getting off the mat.

Bidding wars, first-day-on-the-market deals and even multiple offers are common again, especially in high-demand areas such as the Bay Area and Southern California.

But it’s definitely a tale of two states. For every San Jose or Los Angeles, there is a San Bernardino or Los Banos – cities where many homeowners are still struggling.

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Many communities continue to deal with double-digit jobless rates – 20 of the state’s 58 counties had rates above 10% last month — and many homeowners remain severely underwater with their mortgages.

So, many homeowners could still benefit from Keep Your Home California. The free mortgage-assistance program has helped almost 33,000 homeowners, but many more could receive as much as $100,000, especially in the hard-hit regions of the state.

Keep Your Home California – a $2 billion, federally funded program – has four programs to assist struggling homeowners, with three of the programs designed to help with mortgage payments. The fourth, the Transition Assistance Program, helps homeowners with as much as $5,000 to relocate to new housing after they complete a short sale or a deed-in-lieu of foreclosure.

Of course, homeowners must meet county-by-county income requirements and their mortgage servicer must participate in the program. 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. A loan-to-value ratio of 140% or more now qualifies as a financial hardship under the Principal Reduction Program.

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 nattavut at 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.


Federal shutdown won’t create a slowdown for Keep Your Home California

 The federal government shutdown should not hurt homeowners in need of mortgage assistance from Keep Your Home California.

In fact, Keep Your Home California officials expect little or no disruption of service from the ongoing shutdown and political standoff in the nation’s capital.

While the free mortgage-assistance program was established with federal funds – about $2 billion from the Hardest Hit Fund from the U.S. Treasury, all of those dollars were approved and funded three years ago.

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So, Keep Your Home California already received the funding and has been issuing money since February 2011. And we have hundreds of millions of dollars remaining to help homeowners who have experienced a financial hardship, such as a job loss, cut in pay, divorce or extraordinary medical expenses.

The California Housing Finance Agency, a state agency, manages the mortgage-assistance program that has helped more than 30,000 homeowners. The counseling center continues to handle calls from homeowners and applications are constantly being reviewed.

Basically, it’s business as usual, despite the political standoff at the U.S. Capitol.

Of course, if the impasse continues for some time, there could be delays with processes connected to wage and income statement verification,, but this would only be an issue with a lengthy shutdown.

So, go ahead, make our day – and yours. Call and learn more about Keep Your Home California.

The state program has helped more than 30,000 homeowners since February 2011. Homeowners must meet county-by-county income requirements and their mortgage servicer must participate in the program the homeowner is applying for. And homeowners must also have experienced a financial hardship 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.

 

 

 

 


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