Unaffordable or Underwater Mortgage? Keep Your Home California Could Help With $100,000 in Mortgage Assistance

SACRAMENTO, Calif.–(BUSINESS WIRE)–California homeowners with unaffordable or underwater mortgages could
receive as much as $100,000 in free mortgage assistance from Keep Your
Home California, but they are encouraged to apply soon while the
federally funded program has funds remaining.

The Principal Reduction Program — the only one of the five Keep Your
Home California programs that offers the maximum funding of $100,000
with a single payment — has
been expanded to assist more homeowners
dealing with unaffordable or
underwater mortgages, or in many cases both.

Thousands of homeowners who qualified for the program had the
outstanding principal balance on their first mortgage reduced, with many
also enjoying lower monthly mortgage payments. Homeowners approved for
the program have received an average of $75,000 in principal reduction
and a 14% drop in their monthly payment.

“Reducing principal and lowering the monthly payment can make a huge
impact for many homeowners, and be the difference between keeping and
losing a home,” said Tia Boatman Patterson, Executive Director of the
California Housing Finance Agency, the state agency which oversees Keep
Your Home California. “Many homeowners who are struggling with their
mortgage payments could receive the help they need from the Principal
Reduction Program, providing them with a long-term, sustainable
solution.”

Keep Your Home California began helping homeowners in February 2011,
after the state received almost $2 billion from the U.S. Treasury’s
Hardest Hit Fund. Nearly $1.2 billion in funding has been issued to more
than 58,000 households, with an additional $100 million scheduled for
disbursement. The program is on track to utilize all of its funds before
the December 31, 2017, deadline.

On average, Keep Your Home California has provided more than $33 million
in funding per month to qualifying homeowners, for the past 12 months.
That average jumps to more than $36 million per month in the past six
months. In October, Keep Your Home California provided more than $40
million in assistance, the most ever in a single month since the program
started.

At the current pace, Keep Your Home California funds will be exhausted
by early 2017, meaning the program could stop accepting applications by
the end of 2016.

Of the five Keep Your Home California programs, the Principal Reduction
Program has experienced the greatest growth. Nearly $34 million in
Principal Reduction Program funding was issued in the second
quarter of 2015
, and the program accounts for 50% of the current
transaction pipeline.

As a result, program officials are encouraging homeowners, especially
those with unaffordable or underwater mortgages, to apply for Keep Your
Home California as soon as possible.

Tens of thousands of homeowners in the state could be eligible for the
Principal Reduction Program. The state’s economic recovery has been
uneven, with several regions still struggling with negative equity and
affordability.

According to a recent
report
from the Center for American Progress, more than half of the
counties in California – 31 of 58 – have negative equity mortgages with
15% or more of their homes. And five California counties — Imperial,
Kings, Del Norte, Lassen and Trinity — have at least 25% of their homes
with mortgages underwater.

“California’s economy and housing market have improved, and quite a few
families and homeowners are back on track financially,” Boatman
Patterson said. “But there are still many homeowners who need some help,
and our mission is to provide them with the assistance.”

Keep Your Home California has four other programs, each established to
help homeowners with their mortgage situation:

  • Unemployment
    Mortgage Assistance Program
    : Out-of-work homeowners
    eligible for jobless benefits from the state Employment Development
    Department can receive as much as $3,000 per month for up to 18 months
    in mortgage assistance.
  • Mortgage
    Reinstatement Assistance Program
    : Homeowners who are behind two
    months or more on their payments could receive 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
    : Senior homeowners who are at
    risk of losing their home to foreclosure due to delinquent property
    expenses associated with their Federal Housing Administration-insured
    reverse mortgages could qualify for up to $25,000.

Homeowners seeking more information about Keep Your Home California or
any of its five programs should call 888-954-KEEP (5337) between 7 a.m.
and 7 p.m. weekdays and 9 a.m. and 3 p.m. Saturdays or visit www.KeepYourHomeCalifornia.org.
Representatives can answer questions and take applications in virtually
any language through a translation service and there is never a fee for
any Keep Your Home California services. A Spanish-language version of
the website is also available at www.ConservaTuCasaCalifornia.org.

Contacts

California Housing Finance Agency
Steve Gallagher, 916-326-8612
skgallagher@calhfa.ca.gov