Programs to help troubled homeowners to start in January
California is one of 18 states with money from the Treasury Department’s fund for states hardest hit by the mortgage crisis. Four states have programs up and running, and four others, including California, are running pilot programs, according to the Treasury Department.
The program would make money available to help low- and moderate-income homeowners avoid foreclosure, catch up on overdue mortgage payments, reduce the amount they owe, or, as a last resort, help them transition to rental housing.
CalHFA expects to help about 100,000 Californians, but there are 2.2 million California homeowners underwater on their mortgages.
The program has four components:
- Help making mortgage payments for homeowners who have lost their jobs. Up to six months of benefits as high as $3,000 a month.
- Up to $15,000 to help borrowers who have fallen behind on their payments become current.
- Principal reduction for borrowers whose homes are worth a lot less than they owe. The goal is to reduce principal to market levels so the homeowner can qualify for a mortgage modification.
- Financial help for people who have decided to give up their homes. There’s up to $5,000 per homeowner to help them make that transition.
Shawn
