In an effort to prevent new foreclosures California is offering its Keep Your Home program to homeowners whose federal unemployment benefits may expire in 2013 due to “fiscal cliff” related budget cuts.
The state-managed Unemployment Mortgage Assistance Program provides up to $3,000 monthly for nine mortgage payments or less to Californians who currently are collecting federal extensions of unemployment benefits from the California Employment Development Department.
The move, according to executive director of the California Housing Finance Agency, Claudia Cappio, is an emergency measure.
Its goal is to create a buffer zone for families at risk of losing their benefits if Congress and President Obama fail to extend federal assistance for those who have been facing unemployment for extended periods of time because along with the benefits they may lose their homes.
Keep Your Home California will provide mortgage payment assistance to out-of-work homeowners “regardless of whether federal extension benefits are extended into 2013,” the agency said.
Mortgage payment assistance is offered to homeowners whose mortgages exceed 31% of their income.
To qualify they need to prove hardship and meet county-to-county income limit requirements.
In addition, their mortgage servicer must be one of the participants to the Unemployment Mortgage Assistance Program.
So far nearly 100 mortgage servicers including megabanks such as Bank of America and Wells Fargo Bank have signed up for the program.
Since Keep Your Home California was introduced in February 2011 about 16,000 homeowners have received a total of $151.3 million in state assistance. These funds are part of California’s $2 billion foreclosure prevention effort established under the Hardest Hit Fund provided by the U.S. Treasury.
Options include the Mortgage Reinstatement Assistance Program that offers up to $25,000 to struggling, low- to moderate-income homeowners “to catch up on their mortgage” and a maximum of $100,000 through the Principal Reduction Program.