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More loan servicers added to $2B mortgage-aid program

June 20th, 2011 3:19 PM by Lehel S.

More loan servicers are taking part in a $2 billion state effort to help low- to moderate-income homeowners avoid foreclosure.

The number of mortgage-servicing companies has grown to 21 from the eight that were participating when the Keep Your Home California program began in February, said officials with the California Housing Finance Agency. The project does everything from cutting outstanding loan principals to offering financial assistance to theunemployed.

In April, the housing agency reported having to turn down about 30 percent of interested property owners, more than 8,000 Californians, because their servicers weren't yet in the program. The 21 banks who are participating service about 80 percent of the mortgages in California, officials said last week.

The 21 servicers include six of the major ones in the state: Bank of America, J.P. Morgan Chase, Wells Fargo, GMAC, CitiMortgage and EMC Mortgage. Only six take part in all four programs under the Keep Your Home California umbrella.

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"Now more struggling homeowners in California can be helped," said Evan Gerberding, a spokeswoman with the housing finance agency. "We're still looking for more...Without servicers on board, we haven't helped homeowners directly."

At the start of the program, officials said 100,000 property owners were expected to be helped.

So far, 49 San Diego County residents have received a total of $325,000 in aid. Almost three-quarters of the beneficiaries are receiving mortgage assistance of up to $3,000 a month because they are unemployed.

Another 49 San Diegans will soon receive funding, a total of $550,000.

Statewide, nearly $4 million in benefits have been given out to 645 Californians. More than 80 percent of those people are in the loan-assistance program that helps the unemployed.

Soon, nearly 5,000 homeowners in the state are expected to get funding, agency officials said.

"Unemployment rates are still extremely high," Gerberding said. "And that seems to be the main hardship we are facing right now."

A breakdown of the four programs under the Keep Your Home California effort:

--Mortgage assistance of up to $3,000 per month for unemployed homeowners who are nearing mortgage default.

-Mortgage assistance for homeowners who have fallen behind on payments because of a documented financial hardship. The program gives $15,000 per household.

--Money toward relocation assistance for homeowners who have started a short sale or deed-in-lieu of foreclosure.

--Capital to cut the outstanding principal balance of borrowers who owe more than their homes are worth.

The programs, paid for by the U.S. Treasury Department's Hardest Hit Fund, offer financial help (in one program up to $15,000 per household), relocation assistance, and in one sub-program, principal reduction. In all, it is costing taxpayers $2 billion.

Posted in:General
Posted by Lehel S. on June 20th, 2011 3:19 PM

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