What is principal reduction and how does it help homeowners?

How much does principal reduction help homeowners struggling with their mortgage due to a financial hardship?

Just ask homeowners Charles and Kathleen, Gordon and Bettie, or Elaine (click the links and read their stories).

All these homeowners have benefited from Keep Your Home California’s Principal Reduction Program, which offers as much as $100,000 in principal reduction – all for free. In fact, almost 9,500 homeowners have been approved for the Principal Reduction Program.

charles

Charles and Kathleen

The popular program assists homeowners with unaffordable and/or underwater mortgages in California. About one of every eight homeowners with a mortgage in California has a negative equity mortgage.

Almost half of the homeowners approved for Keep Your Home California in second-quarter 2016 were enrolled in the Principal Reduction Program.

The program lowers principal – the amount owed on the mortgage – and also often reduces the monthly payment. In fact, the average homeowner approved for the Principal Reduction Program enjoyed a monthly mortgage payment reduction of $258, from $1,400 to $1,142.

That means fewer dollars owed and more money in your pocket. It’s a winning combination for everyone, from homeowners to local businesses.

San Francisco homeowners Charles and Kathleen save about $300 every month, thanks to Keep Your Home California’s Principal Reduction Program. “It’s like a weight taken off our shoulders,” Charles says.

elaine

Elaine

The lower monthly payments have definitely helped Elaine of Southern California, who was forced into an earlier-than-planned retirement and receives significantly less income, mostly from Social Security. Her principal was reduced by $81,500, which lowered her monthly mortgage by almost $400.

 

“It’s really made a big difference,” Elaine says

Bettie and Gordon, also of Southern California, save a few hundred dollars every month from the program.

“That was probably one of the happiest days of our lives,” Bettie says of when she and her husband were approved for the Principal Reduction Program.  “The big thing is we are still in our home, and we can stay here.”

bettie

Bettie

And that’s the goal behind the Principal Reduction Program. A vast majority of homeowners who have received principal reduction assistance from Keep Your Home California remain in their home two years later.

Keep Your Home California has three forms of principal reduction. Each plan helps homeowners in a unique way.

  • Principal Reduction-Affordability Provides principal reduction assistance to eligible homeowners with an unaffordable mortgage payment, defined as a debt-to-income ratio greater than 38% of the gross household income. The homeowner does not need to have an underwater – or negative equity – mortgage. The average homeowner has their principal balance reduced by $64,478, and the monthly payment by $296.
  • Principal Reduction-Recast Allows homeowners to obtain an affordable payment and lower total debt associated with their negative equity mortgage without using a servicer-provided loan modification. The rate and terms of the loan do not change, the loan is simply re-amortized based on the new, lower outstanding principal balance, which leads to lower monthly payments. The average homeowner has their principal balance reduced by $56,306, and the monthly payment by $217.
  • Modification In conjunction with a servicer-provided loan modification, program funds are used to lower the homeowner’s outstanding principal balance. The modification changes the terms of the mortgage to ensure the homeowner will have affordable monthly payments going forward. The average homeowner has their principal balance reduced by $37,193, and the monthly payment by $540.

Now, homeowners must have endured a financial hardship, such as a job loss, cut in pay, divorce, death in the family, extraordinary medical bills, or other financial challenges in order to qualify for the Principal Reduction Program. Keep Your Home California representatives will help determine whether the hardship qualifies for the program.

California Suburban Sprawl

 

Homeowners must meet county-by-county income requirements and their mortgage servicer – the company that collects the monthly payment – must participate in Keep Your Home California. Almost 190 servicers are enrolled in the Principal Reduction Program, including Bank of America, Wells Fargo and U.S. Bank.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-KEEP (5337) or find more information at www.KeepYourHomeCalifornia.org or www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.

 

 


Keep Your Home California eligibility requirements protect taxpayer funding

If a close relative trusted you with a lot of money and wanted you to spend it wisely, you would feel a sense of duty and responsibility, right?

Well, that’s the situation for Keep Your California.

Uncle Sam – also known as the U.S. Treasury Department – has issued $2.36 billion to Keep Your Home California during the past five years, with the funds reserved to help homeowners who are struggling with their mortgages due to a financial hardship.

The goal has always been to help prevent avoidable foreclosures and ensure that homeowners who receive assistance are repositioned in a way that ensures they will be able to make their payments going forward. The ideal outcome is to stabilize communities for the long-term, not simply kick the can down the road.

However, an equally important goal for Keep Your Home California is to be good stewards of the federal funds – your tax dollars.

piggy bank

It’s a commitment that program officials take very seriously. Keep Your Home California established four programs in 2011, allowing low to moderate income homeowners to catch-up on past-due amounts, have their monthly payments made for them while they are out of work, or even reduce their outstanding balance and cut their mortgage payments – all for free.

The state-managed program has been a huge success, with more than $1.5 billion already provided or scheduled to 65,000-plus California homeowners. The program has enjoyed record quarters for funding issued during the past year.

 

Many homeowners still need Keep Your Home California. And, Keep Your Home California is here to help.

At the same time, the federally funded program must ensure that homeowners meet eligibility requirements, from county-by-county income limits to an identifiable financial hardship, such as a job loss, cut in pay, divorce, death or extraordinary medical bills.

In addition, Keep Your Home California must consider factors to evaluate the affordability of the home, so that there are reasonable assurances the homeowners will remain in their home after the assistance is provided. If a homeowner is behind and cannot afford their monthly payment, it does not make sense to use program funds to catch them up, only to have them fall behind again.

FamilyinFrontofHouse

Keep Your Home California eligibility criteria helps to make sure homeowners are left in a sustainable situation, as evidenced by the fact that 93 percent of homeowners who receive assistance are still in their homes two years later.

The standards that have been set to identify qualified homeowners are not meant to be a barrier to accessing the assistance. Rather, they were established to make sure that program goals are met.

Keep Your Home California must safeguard taxpayer dollars – and the program must be an effective and appropriate use of these federal funds. Some may feel it’s a hassle, but homeowners applying for the program are required to provide documents, like income information and tax returns, in order to show they have suffered a financial hardship and need the assistance.

Applicants cannot be involved in an active bankruptcy and must live in their home. Keep Your Home California was not established to help with income properties or second homes. And, of course, homeowner credit information and mortgage details are collected and considered.

Then, Keep Your Home California and the homeowner’s mortgage servicer – the company that collects the monthly payments – review the collected information to see if the applicant qualifies for assistance.

It’s much like applying for a mortgage, as it should be, since homeowners approved for the program could receive as much as $100,000 in free mortgage assistance – either from one lump-sum under the Principal Reduction Program or a combination of programs.

Senior Couple at Home

Homeowners do not directly receive the dollars; the funds are delivered from Keep Your Home California to the homeowner’s mortgage servicer so the money can be applied to the homeowner’s mortgage as intended. It’s just one more way to ensure funds are used appropriately.

Make no mistake; Keep Your Home California officials want to help as many homeowners as possible, as long as they meet the program requirements.

In fact, Keep Your Home California has expanded the program on several occasions – for example, increasing mortgage assistance from 12 to 18 months for out-of-work homeowners under the Unemployment Mortgage Assistance program – to allow more homeowners to benefit from the program. Keep Your Home California also added the criterion of negative equity equal to or in excess of 120% of the property value as a qualifying financial hardship for the Principal Reduction Program.

Keep Your Home California cannot add, change or modify a program without an extensive review and approval by the U.S. Treasury Department. It’s all about effectiveness, accountability and responsibility.

Finally, every dollar allocated to Keep Your Home California must be used for the program. Funding cannot be used for other programs or the state budget – only Keep Your Home California.

SONY DSC

Not everyone who contacts Keep Your Home California will qualify for assistance – and that is not necessarily a bad thing. Eligibility criteria are Keep Your Home California’s first line of defense against people trying to defraud the program. The mission is to help homeowners who are at risk of foreclosure due to no fault of their own and whose options are limited. And, the responsibility to utilize the federal funding to achieve this mission is of utmost importance.

Now that you know how and why Keep Your Home California ensures the funding is being used wisely, learn how the free program can put the money to work for you.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org or at www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.


Documentation paves the way for up to $100,000 in free mortgage assistance

Paperwork is part of the application process with Keep Your Home California.

Nothing really new to you here — many of the documents that were necessary when you applied for a mortgage are also required for Keep Your Home California. But our application process may make homeowners eligible for much-needed financial assistance to ease their mortgage problems.

Instead of spending thousands of dollars when obtaining a mortgage –– for closing costs, down payment and escrowed funds — the Keep Your Home California application process is free.

On top of that, the federally funded, state-managed program is actually helping you save your home – along with your commitment, your effort and the money you have invested in your home. Plus, you don’t have to move and, for some people, that is priceless.

documents

Certain documents are needed to determine a homeowner’s eligibility for Keep Your Home California assistance. Documentation of eligibility is required before assistance may be provided, in order to safeguard this taxpayer-funded program.

The following are the most frequently required documents needed to apply for Keep Your Home California:

  • Pay stubs
  • EDD pay stub, if applying for the Unemployment Mortgage Assistance Program
  • Bank statements
  • A hardship affidavit letter (more information regarding hardships below)
  • Third-party disclosure
  • Tax forms from previous years, such as your 1040s
  • Current property insurance statement
  • Current property tax statement
  • A copy of a short sale or deed-in-lieu of foreclosure agreement (if applying for the Transition Assistance Program)

Now, each homeowner – and their situation – is different, so additional documents may be needed to verify eligibility for assistance.

It is almost impossible to overstate the importance of documentation in the Keep Your Home California application process. The reasons why homeowners need the mortgage assistance in the first place are revealed through the documents they provide.

Also, documents are vital to a homeowner’s eligibility determination. In fact, an application for assistance is not complete until all required documents have been provided. The documents are the key to unlocking the door to assistance from Keep Your Home California, which must meet federal requirements to safeguard this taxpayer-funded program.

There are three unique Keep Your Home California programs designed to help homeowners remain in their homes:

As mentioned above, homeowners must have endured or still be suffering from a financial hardship, such as a job loss, cut in pay, divorce, death in the family, extraordinary medical bills or other financial challenges in order to qualify. Keep Your Home California representatives will help determine whether your hardship qualifies for the program.

Also, homeowners must meet county-by-county income requirements and their mortgage servicer – the company that collects the monthly payment – must participate in Keep Your Home California.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org or at www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.

Photo courtesy of the artists of Unsplash.

 


402,000 homeowners faced with underwater mortgages in California

Imagine everyone in Oakland dealing with a financial headache, one that can affect everything from their buying power to retirement plans?

That’s the far-reaching effect of negative equity in California.

Sure, the housing market has enjoyed a big-time boom—the median-home price is at the highest level in seven years—and many homeowners, especially those who bought in the past few years in the Bay Area and Southern California, are money ahead.

ID-10030595

But hundreds of thousands of homeowners—about 402,000—are dealing with an underwater mortgage, where they owe more than the current value of their home, according to the latest Zillow report.

We want to put that in some kind of perspective. It’s the equivalent of everyone who crossed the Golden Gate Bridge during the past three days. Or each traveler who passed through Los Angeles International Airport during the past two days. Or every person who entered Disneyland during the past 10 days.

 

And if you’re dealing with an underwater mortgage, even the happiest place on earth can be difficult to enjoy. Just ask the one of every eight homeowners with a mortgage who is faced with negative equity in the Golden State.

Many of these homeowners bought at the peak of the housing market – between 2005 and 2008, depending on the region – with little or no down payment. Now, they are faced with an underwater mortgage.

In fact, California homeowners have a combined $59.5 billion in negative equity, or about $68,000 per homeowner. And the chance that many of them will dig out anytime soon is unlikely.

‘Continuing to make monthly payments on an underwater home is like renting’

Certainly, the situation continues to improve, especially as home prices rise.  For example, fewer than 3% of homeowners with mortgages in San Francisco are underwater. And only 6.5% in Los Angeles County – though the county has the most underwater mortgages at 75,411, with a combined total of $14 billion in negative equity.

Bakersfield sign 5_12-12

But drive two hours east of the Bay Area or two hours north of Los Angeles and the situation is much different. Madera and Kern counties are dealing with 16%-plus rates of underwater mortgages, respectively. Negative equity is a problem throughout much of inland California, with double-digit rates – and several counties top 19% (Lassen County has the highest rate in the state at 24.8%).

It could be a very long time before these homeowners escape negative equity—or get right-side-up, says Southern California mortgage consultant Greg Cook.

“Continuing to make monthly payments on an underwater home is like renting, but with the interest mortgage deduction,” he says. “And if one of those pesky ‘life events’ happen (such as a divorce or job loss) and they’re forced to sell, it’s either foreclosure or short sale, which puts subsequent homeownership out of the question for three to seven years.”

than-merrill-headshot-2-1

Than Merrill

Now, if homeowners are making their mortgage payments on time and have no plans to sell, then negative equity is not much of a problem, says Than Merrill, a national real estate expert who founded CT Homes LLC and was a host of A&E’s Flip This House.

“Whenever you are confronted with a debt that exceeds the home’s value, otherwise known as negative equity, your financial position on the asset will take a hit,” Merrill says. “However, the fact that you are underwater may not impact your situation as you may have originally anticipated, especially if you have no intentions of moving anytime soon. As long as you are OK paying considerably more than the home is worth, and can afford to continue to do so, your finances should remain intact.”

As much as $100,000 available to help homeowners with underwater mortgages

For homeowners who aren’t OK paying considerably more and want to escape an underwater mortgage, Keep Your Home California is a possible solution. The free mortgage-assistance program’s Principal Reduction Program offers as much as $100,000 to low- and moderate-income homeowners dealing with underwater mortgages.

So far, more than 9,100 homeowners have been approved for the Principal Reduction Program, receiving about $548 million since February 2011. Many of those homeowners were dealing with an underwater mortgage.

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The average homeowner has received $60,220 from the Principal Reduction Program since early 2011. For many homeowners, the program offers another benefit—lower monthly payments. The average homeowner approved for the Principal Reduction Program in the second quarter of 2016 saved almost $260 per month.

Now, homeowners must meet county-by-county income requirements and have experienced or continue to suffer from a financial hardship—such as a job loss, cut in pay, divorce to extraordinary medical expenses—to be eligible for Keep Your Home California. The homeowner’s mortgage service, the company that collects the monthly payment, must participate in the program. About 250 mortgage servicers, including Bank of America and Wells Fargo, are enrolled in Keep Your Home California.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org or at www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.

 


Keep Your Home California eligibility requirements protect taxpayer funding

If a close relative trusted you with a lot of money and wanted you to spend it wisely, you would feel a sense of duty and responsibility, right?

Well, that’s the situation for Keep Your California.

Uncle Sam – also known as the U.S. Treasury Department – has issued $2.36 billion to Keep Your Home California during the past five years, with the funds reserved to help homeowners who are struggling with their mortgages due to a financial hardship.

The goal has always been to help prevent avoidable foreclosures and ensure that homeowners who receive assistance are repositioned in a way that ensures they will be able to make their payments going forward. The ideal outcome is to stabilize communities for the long-term, not simply kick the can down the road.

However, an equally important goal for Keep Your Home California is to be good stewards of the federal funds – your tax dollars.

piggy bank

It’s a commitment that program officials take very seriously. Keep Your Home California established four programs in 2011, allowing low to moderate income homeowners to catch-up on past-due amounts, have their monthly payments made for them while they are out of work, or even reduce their outstanding balance and cut their mortgage payments – all for free.

The state-managed program has been a huge success, with more than $1.5 billion already provided or scheduled to 65,000-plus California homeowners. The program has enjoyed record quarters for funding issued during the past year.

 

Many homeowners still need Keep Your Home California. And, Keep Your Home California is here to help.

At the same time, the federally funded program must ensure that homeowners meet eligibility requirements, from county-by-county income limits to an identifiable financial hardship, such as a job loss, cut in pay, divorce, death or extraordinary medical bills.

In addition, Keep Your Home California must consider factors to evaluate the affordability of the home, so that there are reasonable assurances the homeowners will remain in their home after the assistance is provided. If a homeowner is behind and cannot afford their monthly payment, it does not make sense to use program funds to catch them up, only to have them fall behind again.

FamilyinFrontofHouse

Keep Your Home California eligibility criteria helps to make sure homeowners are left in a sustainable situation, as evidenced by the fact that 93 percent of homeowners who receive assistance are still in their homes two years later.

The standards that have been set to identify qualified homeowners are not meant to be a barrier to accessing the assistance. Rather, they were established to make sure that program goals are met.

Keep Your Home California must safeguard taxpayer dollars – and the program must be an effective and appropriate use of these federal funds. Some may feel it’s a hassle, but homeowners applying for the program are required to provide documents, like income information and tax returns, in order to show they have suffered a financial hardship and need the assistance.

Applicants cannot be involved in an active bankruptcy and must live in their home. Keep Your Home California was not established to help with income properties or second homes. And, of course, homeowner credit information and mortgage details are collected and considered.

Then, Keep Your Home California and the homeowner’s mortgage servicer – the company that collects the monthly payments – review the collected information to see if the applicant qualifies for assistance.

Senior Couple at Home

It’s much like applying for a mortgage, as it should be, since homeowners approved for the program could receive as much as $100,000 in free mortgage assistance – either from one lump-sum under the Principal Reduction Program or a combination of programs.

Homeowners do not directly receive the dollars; the funds are delivered from Keep Your Home California to the homeowner’s mortgage servicer so the money can be applied to the homeowner’s mortgage as intended. It’s just one more way to ensure funds are used appropriately.

Make no mistake; Keep Your Home California officials want to help as many homeowners as possible, as long as they meet the program requirements.

In fact, Keep Your Home California has expanded the program on several occasions – for example, increasing mortgage assistance from 12 to 18 months for out-of-work homeowners under the Unemployment Mortgage Assistance program – to allow more homeowners to benefit from the program. Keep Your Home California also added the criterion of negative equity equal to or in excess of 120% of the property value as a qualifying financial hardship for the Principal Reduction Program.

Keep Your Home California cannot add, change or modify a program without an extensive review and approval by the U.S. Treasury Department. It’s all about effectiveness, accountability and responsibility.

Finally, every dollar allocated to Keep Your Home California must be used for the program. Funding cannot be used for other programs or the state budget – only Keep Your Home California.

SONY DSC

Not everyone who contacts Keep Your Home California will qualify for assistance – and that is not necessarily a bad thing. Eligibility criteria are Keep Your Home California’s first line of defense against people trying to defraud the program. The mission is to help homeowners who are at risk of foreclosure due to no fault of their own and whose options are limited. And, the responsibility to utilize the federal funding to achieve this mission is of utmost importance.

Now that you know how and why Keep Your Home California ensures the funding is being used wisely, learn how the free program can put the money to work for you.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org or at www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.


Higher income limits in 26 counties will help more homeowners

Keep Your Home California recently increased homeowner income limits in 26 counties – or almost half of the counties in the state.

The higher income limits – a boost of several hundred to a couple thousand dollars – will allow more homeowners to be eligible for Keep Your Home California.

Keep Your Home California has already helped more than 65,000 homeowners, and thousands more could benefit from the free mortgage-assistance program, especially with the increased income limits.

For example, four Bay Area counties – Marin, San Francisco, San Mateo and Santa Clara – have new income limits of $129,240, or about $50,000 more than the median household income in San Francisco, according to the U.S. Census Bureau.

And lower-priced, rural counties – think Butte, Fresno, Merced, Tulare and several others – have been increased to $70,680. The higher limit easily exceeds the median household income for these counties. For example, Butte County’s annual median income is $43,165.

Now, county income limits are just part of the requirements for Keep Your Home California. A homeowner’s mortgage servicer, the company that collects the monthly payments, must participate in the program. More than 250 mortgage servicers – including Bank of America, Wells Fargo and Chase – are enrolled in Keep Your Home California.

Homeowners must also have endured or are still dealing with a financial hardship, such as a cut in pay, job loss, death in the family or extraordinary medical expenses. Severe negative equity – an underwater mortgage with a loan-to-value ratio greater than 120% – can qualify as a financial hardship under the Principal Reduction Program.

The Principal Reduction Program offers as much as $100,000 in assistance to reduce homeowners’ outstanding balance on their first mortgage, and often lowers the monthly mortgage payment, further easing the financial burden of homeowners.

Keep Your Home California – a federally funded, state-managed program – has two other first mortgage programs to help homeowners remain in their homes:

  • Unemployment Mortgage Assistance Program – Out-of-work homeowners eligible for jobless benefits can receive as much as $3,000 per month for up to 18 months, or a total of $54,000. The program allows homeowners to focus on finding work without worrying about their mortgage payments.
  • Mortgage Reinstatement Assistance Program – Homeowners can catch-up on past-due mortgage payments with up to $54,000 in assistance. Qualifying homeowners must be able to make their mortgage payments going forward.

Keep Your Home California counselors will determine the best program to help homeowners based on their particular situation. Also, Keep Your Home California has partnered with non-profit housing counseling agencies throughout the state, allowing homeowners to meet face-to-face with counselors to apply for the program, – all for free. Homeowners can check for housing counseling agencies in their region on the Keep Your Home California website.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-KEEP (5337) or find more information at www.KeepYourHomeCalifornia.org or at www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.

Photo courtesy of Unsplash.

 


Celebrating homeownership month by saving homeowners

June is Homeownership Month, when federal and state agencies, lenders and real estate agents educate and encourage home-shoppers to become homeowners.

Homeownership is critical for building strong communities, creating jobs, energizing the economy – and is often a good investment for homeowners over time.

Keep Your Home California was established as a result of the Great Recession. The goal was to help neighborhoods, communities, the economy and, of course, homeowners by providing mortgage payment assistance to people who suffered financial hardships in order to keep them in their homes.

So far, the federally funded, state-managed program has helped more than 64,000 homeowners avoid foreclosure since early 2011.

California Suburban Sprawl

Many of these families would have lost their homes, and it would have taken several years before they could have been eligible to apply for a mortgage and return to being homeowners. Some homeowners may have never been able to afford a home down the road, especially with fast-rising home prices and much-stricter lending requirements.

In fact, only one of every three families could afford to buy the median-priced home in California during the first quarter of 2016, according to the California Association of Realtors.

California’s homeownership rate was about 54% in 2015, much lower than the 61% in 2006 (considered the peak of the housing market) — and a full 10 percentage points below the 64% rate nationwide, according to the U.S. Census Bureau.

In short, buying – and owning – a home in California is much tougher today than a decade ago.

So, Keep Your Home California’s financial assistance to hard-hit homeowners during the past several years is arguably just as important as helping first-time homebuyers. Perhaps even more.

Of course, many of the housing market problems continue to plague Californians.

Foreclosure Notice, House Keys and Model Home on Gradated Background with Selective Focus.

Foreclosures and short sales dominated headlines – and the housing market – from 2007 through 2012. While foreclosures have dropped from the highs of that time period, there were still 23,000 homeowners faced with losing their home and leaving their neighborhoods during the past year, according to the most recent CoreLogic report.

Even with the higher prices, unaffordable or underwater mortgages – where homeowners owe more than the value of their home — are still a concern for many homeowners, especially in the Central Valley, the Inland Empire (Riverside and San Bernardino counties) and Northern California. About 400,000 homes with mortgages are underwater in California, according to the most recent data.

California’s housing market has definitely improved, but it still has a long way to go for many homeowners. So, as we celebrate the efforts to help people become homeowners during Homeownership Month, we should also recognize the importance of homeownership preservation.

Keep Your Home California services are provided free of charge. The program helps homeowners faced with a financial hardship, such as a job loss, cut in pay, divorce, death or extraordinary medical benefits. Homeowners with unaffordable or underwater mortgages can qualify for the Principal Reduction Program, which offers as much as $100,000 on mortgage assistance.

Under the Unemployment Mortgage Assistance Program, out-of-work homeowners could receive as much as $3,000 per month for up to 18 months – or $54,000 total – in mortgage assistance. Homeowners must be eligible for jobless benefits. About 1 million Californians are unemployed, according to the Employment Development Department.

Homeowners must meet county-by-county income requirements, which range from more than $70,000 in rural areas to almost $130,000 in higher-priced regions, such as the Bay Area and Orange County. And a homeowner’s mortgage servicer, the company that collects the monthly payments, must participate in the program. More than 250 mortgage servicers – including Bank of America, Wells Fargo and Chase – are enrolled in Keep Your Home California.

Homeowners interested in learning more or applying for the program should call the counseling center at 888-954-5337 or find more information at www.KeepYourHomeCalifornia.org or at www.ConservaTuCasaCalifornia.org for Spanish speakers. The counseling center is open 7 a.m. to 7 p.m. weekdays and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.