Holden Lewis is on vacation for the week. Marcie Geffner will be writing guest posts while he is out.
Yet another new mortgage assistance program will offer some California homeowners subsidies and grants to help them make their mortgage payments, reinstate a mortgage that's in arrears or pay off part of the principal on their loan.
That sounds like good news for those who qualify. But once again, the rules are so restrictive that the number of recipients may be few.
The money, nearly $700 million, comes from the federal government through the California Housing Finance Agency, known as CalHFA.
The program will hand out:
• Up to $1,500 or 50 percent of the mortgage payment (whichever is less) per month for six months to unemployed homeowners in imminent danger of foreclosure.
• Up to $15,000 or 50 percent of the past-due mortgage amount (whichever is less) to homeowners who need to reinstate their loan to avoid foreclosure. The lender, servicer, mortgage insurer and/or borrower must kick in a dollar-for-dollar match.
• Up to $50,000 to homeowners who have "severe negative equity" to reduce their principal balance to a market level to "prevent avoidable foreclosures and promote sustainable homeownership," according to program website, Keep Your Home California.
• Relocation assistance to homeowners who complete a short sale or deed-in-lieu foreclosure.
To qualify, the homeowner must:
• Own and occupy the home as a principal residence.
• Meet low- or moderate-income restrictions.
• Sign a hardship affidavit and supply supporting documentation.
• Have adequate income to make modified mortgage payments.
• Meet other requirements.
The big win, of course, is the principal reduction payout, which is expected to help approximately 13,375 homeowners. A dollar-for-dollar match from the lender is required, but can be waived if the money is structured as a non-interest-bearing subordinate loan to be forgiven over three years if the homeowner keeps the mortgage current.
It's a small drop in an ocean of woe, but for those who've clamored for the government to make homeowners whole, here it is.
A show of hands, please, folks: Who thinks this program is a good remedy for (a) struggling homeowners, (b) the housing markets, (c) the real estate industry, (d) lenders, servicers and investors or (e) taxpayers?