Politics & Government

Homeowners At Risk Of Default May Find Relief In Taxpayer-Funded Programs

The U.S. Treasury allocated close to $2 billion from its "Hardest Hit Fund'' to CalHFA for distribution to financially strapped California residents either in foreclosure or on the brink of it.

Lake Elsinore and Wildomar residents at risk of defaulting on their mortgages may be eligible for taxpayer-funded financial assistance under a series of programs established by the California Housing Finance Agency, it was announced today.

The agency has fully implemented four programs initiated last summer that provide up to $50,000 in aid to qualifying homeowners. The U.S. Treasury allocated close to $2 billion from its "Hardest Hit Fund'' to CalHFA for distribution to financially strapped California residents either in foreclosure or on the brink of it.

"Our goal is to get the very most out of these federal dollars to assist California families,'' said CalHFA Executive Director Steven Spears. "With families struggling through a number of financial hardships and the disruption in the real estate market, these programs will help those in need while stabilizing neighborhoods and communities severely impacted by foreclosures.''

Find out what's happening in Lake Elsinore-Wildomarwith free, real-time updates from Patch.

The CalHFA programs are part of the agency's "Keep Your Home California'' initiative. Details are available at www.KeepYourHomeCalifornia.org.

Money will be disbursed on a case-by-case basis, according to CalHFA.

Find out what's happening in Lake Elsinore-Wildomarwith free, real-time updates from Patch.

Riverside County had the second-highest foreclosure rate in the state last year, with more than 7 percent of the county's housing stock in foreclosure.

For county property owners to qualify for CalHFA assistance, their household income cannot exceed $78,000, according the agency. Income limits
vary by county.

Other general requirements:
   -- a homeowner must plan to remain at the residence for at least three years;
   -- the applicant must not own a second property;
   -- the home must not have been purchased after Jan. 1, 2009; and
   -- it must not have been refinanced for the purpose of taking out a home
equity line of credit.

Under one program, if a household's breadwinner becomes unemployed and faces the prospect of defaulting on a loan, the household may be eligible for up to $3,000 a month in mortgage payment assistance.

Another program will provide $15,000 up front to bring a borrower out of default.

The maximum amount available under Keep Your Home California is $50,000. The money is a direct subsidy and does not have to be repaid unless the recipient chooses to sell the property within three years, according to CalHFA.

Loan servicers are required to match the payments made by the state.

Most major mortgage providers are participating in Keep Your Home California,
including Bank of America, Citi, JP Morgan Chase and Wells Fargo.

"The problems of unemployment and the unprecedented disruption in our real estate markets have impacted too many families,'' Spears said. "These programs are designed to move homeowners who have been told 'no' into the 'yes' category and qualify them for a mortgage they can afford over the long term.''

The Keep Your Home California programs are the latest in a host of foreclosure prevention attempts, starting with the federally sponsored "Hope Now'' program in 2008, which created a partnership between the government and a number of loan servicers, with the goal of extending loan modification offers to financially distressed homeowners.

In 2009, the California Foreclosure Prevention Act went into effect, requiring lenders to work more closely with borrowers on loan adjustments. It followed the Obama administration's Home Affordable Modification Program, which requires participating lenders to seek out defaulting homeowners to set up more economical repayment terms. --City News Service


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