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Keep Your Home California changes guidelines to help more homeowners

Keep Your Home California changes guidelines to help more homeowners

By Ron Trujillo / ron@calhomenews.com

Keep Your Home California is entering the final stretch of the free mortgage-assistance program that has helped almost 80,000 homeowners dealing with a financial hardship.

The federally funded program has made some major changes in recent months, allowing more low- and moderate-income homeowners to qualify and get the help they need. The changes come as Keep Your Home California has issued about 90% of its $2.3 billion in funding.

Despite a booming economy and housing market, Keep Your Home California continues to handle hundreds of calls daily and has issued more than $86 million in funding for nine consecutive quarters. And about 10% of the homeowners with a mortgage in California remain underwater, especially in still-recovering housing markets like the Central Valley and Northern California.

Now, Keep Your Home California officials hope expanding guidelines will help more homeowners in a number of ways.

The biggest changes are with the Unemployment Mortgage Assistance Program. Keep Your Home California’s most popular program covers the monthly mortgage payment for out-of-work homeowners eligible for unemployment benefits from the state Employment Development Department. Recently, the state program has eliminated the monthly $3,000 payment limit.

Instead, the Unemployment Mortgage Assistance Program has established a maximum limit of 18 months or a total of $54,000, whichever comes first. The change allows homeowners with larger payments to apply for the program.

In addition, the Unemployment Mortgage Assistance Program will now cover past-due payments so homeowners to catch-up on their mortgage and stay in good standing moving forward. Again, with a combined maximum funding limit of $54,000.

A couple of other changes will also affect the Unemployment Mortgage Assistance Program — and help homeowners. Now, homeowners can be eligible for the program if they have received jobless benefits within the past 60 days, double the previous 30-day limit.

So, even if a homeowner’s EDD benefits have ended, as long as it was less than 60 days ago, they could still qualify for Keep Your Home California. The change allows homeowners more time to apply for the program.

Other changes to Keep Your Home California:

  • Homeowners can apply and be approved for the Mortgage Reinstatement Assistance Program multiple times, if necessary. However, the homeowner must have experienced a new hardship each time they apply for the program. The Mortgage Reinstatement Assistance Program helps homeowners catch-up on their past-due mortgage payments, up to a total of $54,000. For example, they could apply and get $25,000 from the program, and would only be eligible for another $29,000.
  • Severe negative equity has increased to 115% from the previous 120% under the Principal Reduction Program. The program offers as much as $100,000 in principal reduction, and also often lowers the monthly mortgage payment.
  • Homeowners with interest-only loans, popular during the housing boom in the mid-2000s, are now eligible for the Principal Reduction Program. However, the monthly mortgage payment must be affordable under program guidelines once converted into a fully amortized, fixed-rate loan. Previously, interest-only loans were not eligible for the Principal Reduction Program.

Photo courtesy of Jeff Turner/Flickr

Are you eligible?

  • Homeowners must have experienced a hardship, such as a job loss, cut in pay, divorce, death in the family or extraordinary medical expenses.
  • Homeowners must also meet county-by-county income limits, which range from $84,453 in rural counties to more than $150,000 in the Bay Area.
  • The homeowner’s mortgage servicer, the company that collects the monthly payment, must also participate in Keep Your Home California. More than 250 servicers, including Bank of America and Wells Fargo, are enrolled in the program.

How to apply:

Call the Keep Your Home California counseling center at 888-954-5337. The center is open 7 a.m. to 7 p.m. weekdays, except for holidays, and 9 a.m. to 3 p.m. Saturdays. Calls can be taken in virtually any language through a free translation service.

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