Unemployed homeowners up to $18,000 each over six months to pay their mortgage

12 Jan


On Monday, more than two months behind schedule, the California Housing Finance Agency will begin taking applications for a federally funded program that will give some unemployed homeowners up to $18,000 each over six months to pay their mortgage.

To qualify, homeowners must meet income and other restrictions and their loan servicer must participate in the program. As of Friday, only three servicers had signed up, but CalHFA expects to have up to 10 by the end of this week.

The program is the first of four in California that will be financed by the Hardest Hit Fund, a $7.6 billion pot of money the Treasury Department is providing to 18 states with high unemployment rates or big drops in housing prices.

The Obama administration announced the fund in February but kept adding states and money to it throughout last year. California was one of the first states to qualify and stands to receive almost $2 billion, but has not yet launched a program.

The other three CalHFA programs, which go under the umbrella name Keep Your Home California, will:

— Give homeowners who have fallen behind on their mortgage payments up to $15,000 to reinstate them.

— Reduce principal balances by up to $50,000 for borrowers who owe more than their homes are worth.

— Provide up to $5,000 in transition assistance to homeowners who give up their homes in connection with a short sale or deed-in-lieu of foreclosure.

A homeowner might qualify for more than one program, but can’t get more than $50,000 in total assistance.

CalHFA had promised to start taking applications for all four programs Nov. 1, but each one requires loan servicers to participate and their assistance has not been easy to get, even though lenders stand to benefit.

That’s partly because each state getting hardest-hit funds can design its own program and that has created administrative burdens for national servicers.

“They have asked us to have a unified process,” says Evan Gerberding, a spokeswoman for CalHFA.

Unemployment program

California’s unemployment assistance program, which begins Monday, has many requirements.

— You must be receiving unemployment benefits, but you can not be within 90 days of exhausting them.

— Your income must be 120 percent or less of the median income for a family of four in your county. In San Francisco, your income must be $119,300 or less. For other counties, see sfg.ly/g58tX0.

— Your loan must have originated on or before Jan. 1, 2009, and the balance cannot exceed $729,750.

— You must be delinquent or at risk of becoming delinquent, but you can’t be in foreclosure or more than three months past due.

— You must live in the home or condo, and you cannot own any other real estate.

— You will not qualify if you refinanced your mortgage for more than the outstanding balance (except to pay for mortgage-related fees). If you refinanced just to get a lower rate, you will not be disqualified.

— If you have a stand-alone second mortgage, such as a home equity loan or line of credit, you will not qualify.

Homeowners can get up to $3,000 per month or 100 percent of their mortgage payment, whichever is less, for up to six months.

The assistance will be structured as a non-recourse, non-interest-bearing lien against the property that is forgiven after three years. If you default on your payments, sell or refinance within three years, you might have to repay it.

To apply, contact your servicer or call a toll-free number that CalHFA will post on its website by Monday. If you call the number, a housing counselor will help determine if you are eligible and if so, work with your servicer. For more information, see keepyourhomecalifornia.org.

Other programs

As of Friday, only three servicers – Chase, CalVet and CalHFA itself – had signed up for the unemployment assistance program.

Representatives for Chase, Wells Fargo and CitiMortgage say they will participate in California’s unemployment assistance and mortgage reinstatement programs but have no immediate plans to sign up for the other two.

A spokesman for Bank of America would not say which if any of the California programs BofA will sign up for. In a statement, BofA said it supports the Hardest Hit Fund concept but it will “focus our collaborative efforts on implementing consistent programs nationally.”

Gerberding says CalHFA hopes to launch the other programs in mid to late February.

Getting lenders into the principal reduction plan could be a challenge because they must match any reductions the program provides dollar for dollar.

“Where principal reduction is appropriate, we are focusing on the HAMP principal reduction alternative,” Wells Fargo spokesman Tom Goyda says, referring to a new option under the federal Home Affordable Modification Program. “That allows us to do principal reductions in all 50 states.”

Under that program, Wells is only reducing principal on loans it owns, not those it services for others, including Fannie Mae and Freddie Mac.

Fannie and Freddie have not allowed principal reductions on loans they own or back – and these account for the majority of home loans. (They have allowed principal to be reduced for the purposes of calculating a modified mortgage payment, but this principal is not forgiven.)

Whether Fannie and Freddie can permanently reduce principal under state hardest hit programs “is under review,” says a spokeswoman for the Federal Housing Finance Agency, which oversees Fannie and Freddie.

TARP funding

CalHFA has allocated $875 million of its hardest hit funds for unemployment assistance, $790 million for principal reduction, $129 million for mortgage reinstatement and $32 million for transition assistance.

If one program does not use all of its funding, “then we will spread it among the others,” Gerberding says. She estimates that funds could be available for up to three years.

Hardest hit funds are coming out of the $50 billion set aside for foreclosure prevention under the Troubled Assets Relief Program. Although funding for new TARP programs ended in October, “existing programs already allocated under TARP will continue to run,” says Treasury Department spokeswoman Andrea Risotto.

Risotto says that 12 states that have received hardest hit funds are testing or operating programs. By March, she says, all 18 states, plus the District of Columbia, will be operational.

For more information on the Hardest Hit Fund, see finan cialstability.gov/roadtostabil ity/hardesthitfund.html.

5 Responses to “Unemployed homeowners up to $18,000 each over six months to pay their mortgage”

  1. M B January 14, 2011 at 2:29 pm #

    How does this help homeowners? It merely puts more money in the banks hands while they wait to foreclose and get government guarantees for defaulting loans. It’s sick. All of this is just a shadow bailout.

  2. a p giannini - M g March 15, 2011 at 9:09 pm #

    Arh mortgage corp – alliance bank ,first franklin bank ,liberty bank ,portland mortgage corp ,vision mortgage corp. Conitnental lending group , plus funding mortgage , united companies funding group , united guaranty residential insurance co , asscess mortgage corp ,ampro mortgage corp ,united financial mortgage corp , all these companies are under a p giannini the founder owner ship to fraud . I hope the forcloser stop . They don’t need to do no more of that .

  3. michael grimes April 17, 2011 at 12:48 am #

    Here a tap of the fraud at hand , coming up – aug 8 -2011 – great lakes dredge & dock corp , wellsfargo and merrill lynch co .

  4. michael rockefella a p giannini April 28, 2011 at 2:18 pm #

    Michael pierpont morgan – Grimes – charles m – owns – united state mortgage and trust company , us steel corp , national city bank , us trust , bear stern co , austin bank of chicago , boatsmen bank , garuntee trust company , citizen bank na , synous bank na , bank of north geogia , , citizen trust bank , united citizen trust bank , nations bank , sovran bank , chemical bank in 1906 mergered with , united state mortgage and trust company . Bank one , all of these companies are in jpmorgan or bank of america , old names banco , central banco , bank of scotland. , bank banco . Dates back 600 years ago. And I’m the sole air owner ;just robbed like their is no law of the land . . . Is this a joke . Charles williams , marvin grimes , peter hoffman , john hellman . , william k black , said all this this fraud is stupid , and its is , idiots doing this fraud .

  5. michaeheir keys August 25, 2012 at 12:20 am #

    The laws is what make the get away for anybody on any issue and event . . . . Like if the law says forcloser a home owner if the bank gave him a mortgage , and he defaulted on it , and if he was owner and didn’t soppose to have get a mortgage on the property from the jump , why would the law say forcloser him or she if the sign it , to me the law need to say , if the bank trick somebody into a mortgage on their own, property, they own . They need to be arrested and made, to, repay the owner back the funds they gave to the bank by a, trick, and the property back too . People who and what are we thinking about as far as laws . Because, from the, looks of this , all the laws are the problem the laws are so wrong , and they need to be set rights , they all out of place . Put the laws back in the, right, place, watch, what happen . Short sell is a good thing , on home owner who don’t need forcloser on their credic report , but , let the owner banks , let’s the owner no u are short selling the home and also canl the debt , after the sell even if u don’t get the amount u asking for in the short sell don’t send the banl to the old owner after the house is bought off to the new owner , then let the new owner get the debt too . Because u have owner in geogia , that don’t even no their home been short sold first of all . Then u want to put the short sale banl on them too . . Short sell mean forcloser with out a notice , the old owner just sitting in the house watch tv , and thinking he the owner , and next thing u no writ of poss from the court house at the door , and u didn’t have a clue too this . That kind of dirty . If a person is slow n he think u robbing him or she .

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