You may recall that last week we talked about how it might be in everyone’s best interest if the banks would work with homeowners to modify their existing loans.
As we discussed, modifications would allow people to stay in their home with adjusted payments that would alleviate some of the stress of their current financial hardship. This would lead to fewer homes being placed on the market in a distressed situation. Fewer distressed homes, often vacant and run down, would help to stabilize the values of properties and benefit all homeowners and communities.
The U.S. Treasury Department has approved CalHFA’s plan to use nearly $2 billion in federal funding to help California families struggling to pay their mortgages. The California Housing Finance Agency just announced that people who cashed out equity on their home now are eligible for three of the four “Keep Your Home California” programs. Under the new rules, people who took equity out of their homes will be eligible for the unemployment mortgage assistance, mortgage reinstatement assistance, and transition assistance programs if they meet all the other program requirements. Homeowners who cashed out equity will continue to NOT be eligible for the principal reduction program. Check your eligibility at www.keepyourhomecalifornia.org or Homeowners Call Toll Free 888-954-KEEP(5337).
The programs are focused on assisting low and moderate income families stay in their homes, when possible, and leveraging additional contributions from mortgage servicers.
The primary objectives for the programs include preserving homeownership for low and moderate income homeowners in California by reducing the number of delinquencies and preventing avoidable foreclosures and assisting in the stabilization of California communities
Each of the programs is designed to address one or more aspects of the current housing crisis by doing the following things. Helping low and moderate income homeowners retain their homes if they either have suffered a financial hardship such as unemployment; have experienced a change in household circumstance such as death, illness or disability, or are subject to a recent or upcoming increase in their monthly mortgage payment and are at risk of default because of economic hardship when coupled with a severe decline in their home’s value. It is intended to create a simple, effective way to get federal funds to assist low and moderate income homeowners who meet one or all of the objective criteria described above. Speed of delivery will be balanced with fulfillment of the specific program’s mission and purpose. It was also designed to create programs that have an immediate, direct economic and social impact on low and moderate income homeowners and their neighborhoods.
Each of the approved programs has certain borrower and property specific eligibility requirements. The eligibility criteria are designed to assist those who have been most seriously impacted by the current housing crisis. There are General Borrower requirements.
A Borrower does NOT need to be a CalHFA borrower. The borrower must own and occupy the home as their primary residence. Borrower must meet low and moderate income limitations. Borrower must complete and sign a Hardship Affidavit and document the reason for the hardship, which may include the loss of employment, reduction of income, disability or illness. Borrower must have adequate income to sustain modified mortgage payments according to lender guidelines. A Borrower’s mortgage loan is delinquent or the servicer received documentation from the borrower that substantiates an imminent default that meets hardship qualifications. Borrowers who have recently encountered a financial hardship due to their military service are presumed eligible on the condition that their servicer has received a financial hardship statement provided by the borrower.
General property eligibility requirements include that the mortgage is the first lien loan. The current, unpaid principal balance cannot exceed $729,750. The property must not be abandoned, vacant or condemned. The property must be owner-occupied, the borrower’s principal residence, and located in California. Not everyone or every property will qualify for these programs.
We know that government assistance isn’t the answer for all the problems we have in housing and the economy. I just want you to know that whatever your personal situation is, there may be some help out there for you. Talk to a local professional Realtor. They should be familiar with what programs may be available for you and help you to make informed decisions.
Sticking your head in the sand is never a good alternative. The National Association of Realtors along with the California and Lodi Association of Realtors are working hard to protect private property rights and are negotiating with and making recommendations to the banking industry and government in an effort to help our Nation’s economy recover.
Questions and comments can be made to Kerry Suess at firstname.lastname@example.org.