Goodbye HAMP, hello Keep Your Home California

While many Americans cheered, made soon-to-be broken resolutions, raised a glass for a celebratory toast, or sang Auld Lang Syne to ring in 2017, a popular and successful federal mortgage-assistance program essentially ended with little ceremony on New Year’s Eve.

The Home Affordable Modification Program (HAMP) started in February 2009, at the height of the foreclosure crisis. Since then, the Making Home Affordable-managed program has assisted more than 2 million Americans struggling financially and faced with the very real possibility of losing their homes.

But as HAMP fades away, Keep Your Home California and its Principal Reduction Program will continue to help homeowners in the state faced with financial hardships and hard-to-make mortgage payments through 2020, or until all the funding is used, whichever comes first.

Keep Your Home California, also federally funded, shares the mission of helping homeowners to remain in their homes. There are five unique programs that make up Keep Your Home California, designed to address the different circumstances homeowners face that could lead to foreclosure.


Like HAMP, Keep Your Home California requires homeowners to have suffered a hardship, such as a job loss, cut in pay, reduced hours, divorce, a death in the family or extraordinary medical bills.

HAMP helped homeowners with their mortgages by extending terms, adjusting mortgage rates, and reducing or temporarily deferring principal payments.

Keep Your Home California’s Principal Reduction Program offers different, but comparable benefits for homeowners. The Principal Reduction Program provides as much as $100,000 in assistance to reduce a homeowner’s outstanding principal balance. The lower principal balance is then recast, with no changes to the rate or term of the loan, often resulting in lower monthly mortgage payments. In the fourth quarter of 2016, the median monthly payment was reduced by $258 after Principal Reduction Program assistance was provided.

The Principal Reduction Program can also help homeowners solve for affordability, regardless of their equity position. If a homeowner’s monthly payment becomes unaffordable due to a financial hardship, they can qualify to have their principal balance reduced to a level that will result in an affordable monthly payment based on their income.

Keep Your Home California will continue to offer the Mortgage Reinstatement Assistance Program – allowing homeowners to catch-up on their past-due mortgage payments, up to $54,000. It also offers the Unemployment Mortgage Assistance Program which provides as much as $3,000 per month for up to 18 months – or a maximum of $54,000 – to out-of-work homeowners eligible for jobless benefits from the California Employment Development Department.

Homeowners who planned to apply for HAMP, but failed to make deadline of Dec. 31, 2016, should consider Keep Your Home California’s Principal Reduction Program, or another Keep Your Home California program that can help them in their situation. The state-managed program is completely free, from the first phone call to the mortgage assistance, whether it’s a few thousand dollars or up to the maximum of $100,000.

In addition to a financial hardship, 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. More than 250 servicers, including Bank of America, Wells Fargo and U.S. Bank, are enrolled in the program.

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 or 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 can help homeowners who received HAMP modifications lower their monthly mortgage payments

More than 300,000 homeowners in California have benefited from a federal program that lowers their interest rates – and their monthly mortgage payments.

The federal government’s Home Affordable Modification Program (HAMP) has been a much-appreciated and greatly needed program for homeowners struggling with their mortgage payments. Almost 325,000 homeowners in California have been approved for permanent loan modifications under HAMP, saving an average of $720 per month – and allowing many of them to remain in their homes.

HAMP logo

However, after five years at a rate as low as 2%, most homeowners in HAMP Tier 1 modifications will experience an interest rate increase, up to 1% per year until their rate adjusts to the market rate at the time of their modification.

For California homeowners, the median interest rate after adjustment will be 4.5% – well below their interest rate before modification. The final rate step-up will result in homeowners paying a median of $317 more per month.

For some homeowners, even a slight payment increase could make it difficult to meet their monthly mortgage obligation. If homeowners find themselves in this situation, Keep Your Home California may be able to help.

Keep Your Home California’s Principal Reduction Program offers as much as $100,000 to reduce the outstanding principal balance, which can save homeowners hundreds of dollars every month on their mortgages. Homeowners must be able to demonstrate a financial hardship in order to qualify for assistance through the program. An increase in a homeowner’s monthly mortgage payment that causes the payment to be unaffordable is a qualifying hardship.

The average homeowner approved for the Principal Reduction Program had their mortgage payment reduced by $269 per month during the second-quarter of 2014. And their average loan-to-value ratio fell from 146% to 112% during the second quarter.

So, homeowners approved for the state-managed program can benefit with lower monthly payments – and be much closer to right-side-up on their mortgage.

To qualify, homeowners must meet county-by-county income requirements, and their mortgage servicer must participate in Keep Your Home California. Currently, more than 200 servicers are enrolled in the program, including Bank of America, Wells Fargo, Chase and several other large servicers. To check the complete list of mortgage servicers enrolled in the program, visit

If you would like more information or want to apply for Keep Your Home California, call 888-954-KEEP (5337) or visit (those more comfortable speaking Spanish should visit 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.