$100,000 in Principal Reduction Available to Struggling HomeownersPosted: June 25, 2013
California has been enjoying some of the fastest-rising home prices in the nation, but many homeowners are still struggling with their mortgage payments.
Double-digit gains in home prices are great for homeowners, but they don’t help the immediate need of making the monthly payment.
Keep Your Home California – a free, state-run program – could be the answer for hard-hit homeowners who have an economic hardship and have experienced a dramatic decline in their home’s value. Keep Your Home California’s Principal Reduction Program offers as much as $100,000 to help homeowners, possibly lowering mortgage payments by hundreds of dollars per month.
In fact, for homeowners approved for principal reduction during the first three months of 2013, their median monthly payment was curbed from $1,848 to $1,478. Could you use an additional $370 per month or about $4,500 per year?
Because many mortgages remain underwater — about one of every four homeowners with a mortgage owes more than the value of their homes — more homeowners are looking into principal reductions. Keep Your Home California has been handling many more applications for principal reduction recently, with applications soaring 43% during the first quarter, compared to the fourth-quarter of 2012.
More participating mortgage servicers – the companies that collect your monthly payments – and the new loan recast option are the primary reasons for the increase. Under a loan recast, homeowners can be approved for principal reduction without a formal loan modification. Basically, Keep Your Home California has made principal reduction much easier during the past several months.
Keep Your Home California has helped a couple thousand homeowners with principal reduction. Some are still in process while others have been funded already –, but thousands more could benefit from the program. It requires some paperwork and patience; the average application took about 80 days during the first quarter, down from 114 days in first-quarter 2012.
Of course, homeowners must meet income requirements (county-by-county limits area available at http://keepyourhomecalifornia.org/income-limits/) and their mortgage services must participate in the Principal Reduction Program. Currently, 77 mortgage servicers – including Bank of America and Wells Fargo – are enrolled in the program (check out the complete list at http://keepyourhomecalifornia.org/participating-servicers/).
If you have 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 Stuart Miles FreeDigitalPhotos.net