Posted by: Catherine | March 23, 2011

Save your home from foreclosure, help from California

I wrote a couple of months ago about a new website and wanted to just revisit this and be sure the word is still out there that for some, there is help to save your homes.

I’ve received calls from two homeowners this week looking to short sell their homes, but it’s unfortunate as both desperately have tried everything to save them.  They have jobs, they’ve applied for loan modifications, they’ve attended seminars and consulted with non profit HUD counselors.  For some, without a meaningful principle reduction, a loan modification is just delaying the ultimate reality that it will be years before they can ever get out from under being “short” and the reality that if they have to short sell in 3, 5 or even 10 years, they may not have the protections currently offered to short selling borrowers now i.e. Mortgage Debt Forgiveness, income tax/cancelled debt income tax.

No one knows the future, but in some areas where prices have dropped 50% or more from their height, just when can people think about being able to even break even?  It’s mind boggling.

So here are 4 programs available through the “Keep Your Home California” program website:

Unemployment Mortgage Assistance Program (UMA) – Intended to assist homeowners who have experienced involuntary job loss. UMA will provide temporary financial assistance in the form of a mortgage payment subsidy of varying size and term to unemployed homeowners who wish to remain in their homes but are in imminent danger of foreclosure due to short-term financial problems. These funds can provide up to six months of benefits with a monthly benefit of up to $3,000 or 100% of the existing total monthly mortgage, whichever is less.

Mortgage Reinstatement Assistance Program (MRAP) – Intended to assist homeowners who have fallen behind on their mortgage payments due to a temporary change in a household circumstance. MRAP will provide limited financial assistance in the form of funds to reinstate mortgage loans that are in arrears in order to prevent potential foreclosures. These funds can provide benefits of up to $15,000 per household.

Principal Reduction Program (PRP) – Intended to assist homeowners at risk of default because of an economic hardship coupled with a severe decline in the home’s value. PRP will provide capital to reduce outstanding principal balances of qualifying borrowers with negative equity. Principal balances will be reduced in an effort to prevent avoidable foreclosures and promote sustainable homeownership. The principal reduction program will most likely be a prelude to loan modification. (Servicers that contribute through matching funds increase the benefit for homeowners).

Transition Assistance Program (TAP) – Intended to promote community stabilization by providing homeowners with relocation assistance when it is determined that they can no longer afford their home. TAP will be used in conjunction with a servicer-approved short sale or deed-in-lieu of foreclosure program in order to help homeowners transition into stable and affordable housing. Homeowners will be responsible to occupy and maintain the property until the home is sold or returned to the servicer as negotiated. Funds will be available on a one-time only basis.

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