Keep Your Home California expands Reverse Mortgage Assistance Pilot Program

Change can be good, especially when it involves coming to the aid of a struggling homeowner.

Keep Your Home California has expanded its Reverse Mortgage Assistance Pilot Program, allowing more senior homeowners at risk of foreclosure because of past-due property expenses to qualify for as much as $25,000 in assistance.

The pilot program is now available to low and moderate income senior homeowners who have proprietary reverse mortgages. Previously, only homeowners with a Federal Housing Administration (FHA) Home Equity Conversion Mortgage (HECM) were eligible for program consideration. .

Keep Your Home California also recently streamlined the counseling process, allowing homeowners to receive the mortgage assistance much faster.

The pilot program, which started in early 2015, was established to help homeowners 62 years or older who are at risk of losing their home to foreclosure after getting behind on their reverse mortgage property-related expenses.

“The taxes are so high, and they go up every year. I just didn’t have enough income.” Verna H.

Although homeowners receive income from reverse mortgages, they are still responsible for property-related expenses, including property taxes and homeowners insurance. And fast-rising home prices have a financial effect on senior homeowners with reverse mortgages, especially those who live on fixed incomes.

“The taxes are so high, and they go up every year,” says Verna H., who bought her home in Southern California in 2005 and received a reverse mortgage on the property two years later. “I just didn’t have enough income.”

It’s an all-too common concern for senior homeowners. But Keep Your Home California’s reverse mortgage assistance program definitely helps.

“It saved our lives,” says Joanne H., a homeowner with a reverse mortgage in Central California who has benefited from Keep Your Home California.  “The weight it took off … you just don’t know. We were going to lose our home.”

Keep Your Home California’s Reverse Mortgage Assistance Pilot Program has helped Verna, Joanne and many other seniors avoid foreclosure and get back on solid financial ground.

“It was a real lifesaver to me,” says Jeanette M., who moved into her Southern California home in 1999 and received a reverse mortgage several years ago. After her husband passed away, her already tight budget became even more difficult. “It was not a pretty picture. We were way in the hole.”

The details about the program

Special counseling from a HUD approved nonprofit agency allows seniors to assess their financial situation and helps them manage their delinquent property-related expenses. In addition to reinstating qualifying homeowners’ past-due expenses, the Reverse Mortgage Assistance Pilot Program can also provide up to 12 months of additional assistance for future expenses, in order to help get homeowners back on their feet. Senior homeowners must meet county-by-county income limits and be able to document an eligible financial hardship such as — loss of income, a divorce, a death in the family or extraordinary medical expenses – in order to qualify for the free mortgage-assistance program.

Homeowners must also live in the home with the reverse mortgage and demonstrate their ability to make the property expenses going forward.

“People are scared because they don’t think the program can help, but it’s not that way,” says program recipient Jennie M., who lives in Central California. “It’s a positive step that can help you.”

Homeowners seeking assistance should contact their reverse mortgage servicer to begin the application process for the reverse mortgage program. Fifteen mortgage servicers participate in the program: American Advisors Group; Celink; Champion; Financial Freedom; James B. Nutter; Liberty Home Equity Solutions in Michigan and Texas; Live Well Financial Inc.; Ocwen Loan Servicing LLC; Plaza Home Mortgage Inc.; Reverse Mortgage Funding (RMF); Reverse Mortgage Solutions (RMS); SunWest; Urban Financial of America and Wells Fargo.

Keep Your Home California has set aside about $10 million for the program, enough to help about 830 seniors. The average senior homeowner will receive about $13,000. As of December 31, 2016, 537 homeowners received $6.7 million in assistance through the program.

If you would like more information about the Reverse Mortgage Assistance Pilot Program, please visit www.KeepYourHomeCalifornia.org. Homeowners more comfortable with Spanish should visit www.ConservaTuCasaCalifornia.org.

 

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Free mortgage events connect homeowners with Keep Your Home California counselors, representatives

 Keep Your Home California is often on the road, attending events and helping homeowners with their mortgage issues, from Lake County in Northern California to the desert communities of Southern California.

It’s an effort to connect with, educate and encourage homeowners about the free mortgage-assistance program, which has helped more than 55,000 people since February 2011—or the equivalent of about half of the people in Richmond, Temecula or Ventura.

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So far, Keep Your Home California representatives have attended 93 events since the beginning of 2015, or more than 12 per month. In fact, the state program has participated in 778 events since early 2011—more events than baseball games played by any one of the Golden State’s Major League Baseball teams over the same period.

The free events allow counselors and program representatives to meet face-to-face with homeowners and answer questions about Keep Your Home California, and even help with the application process. The Keep Your Home California website offers an up-to-date calendar of events for homeowners.

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Keep Your Home California often partners on these free events with mortgage servicers that participate in the program—including Bank of America and Wells Fargo— and the dozens of housing counseling agencies statewide that meet one-on-one with homeowners.

The collaborative effort benefits the housing counselors, the mortgage servicers, Keep Your Home California, and most importantly, financially strapped homeowners interested in the program.

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Thousands of homeowners have been exposed to the state-managed program at these events during the past four-plus years. From couples who are casualties of corporate cost-cutting to families faced with hard-to-make mortgage payments, Keep Your Home California has a program ready to help:

  • Principal Reduction Program: Homeowners who owe more than their home is worth and/or have an unaffordable payment can cut their mortgage principal as much as $100,000 while saving hundreds of dollars every month. Homeowners approved for the program enjoyed an average savings of $216 per month, from $1,316 to $1,100 during first-quarter 2015, the latest figures available.
  • Unemployment Mortgage Assistance Program: Out-of-work homeowners who have received jobless benefits from the state Employment Development Department in the previous 30 days can receive as much as $3,000 per month for up to 18 months for their mortgage payments.
  • Mortgage Reinstatement Assistance Program: Homeowners who are behind two months or more on their payments can qualify for as much as $54,000 to help them “catch up” on their past-due mortgage payments. Homeowners must have recovered from their financial hardship and be able to make their mortgage payments going forward in order to be eligible for the program.
  • Transition Assistance Program: Homeowners who have reached an agreement for a deed-in-lieu of foreclosure or short sale with their mortgage servicer could receive up to $5,000 in relocation assistance.
  • Reverse Mortgage Assistance Pilot Program: Homeowners 62 years or older who are at risk of losing their home to foreclosure due to delinquent property expenses associated with their Federal Housing Administration (FHA)-insured reverse mortgages can qualify for as much as $25,000 in assistance. The program reinstates past-due property-related expenses such as taxes and homeowner’s insurance, and provides up to 12 months of additional assistance to ensure homeowners get back on their feet.

If you would like more information about Keep Your Home California and the five programs, attend an upcoming event or call the counseling center at 888-954-KEEP (5337) or visit www.KeepYourHomeCalifornia.org (Spanish speakers should visit http://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.


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.

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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 http://keepyourhomecalifornia.org/participating-servicers/.

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


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.