FEBRUARY 2015
KeepYourHomeCalifornia | Newsletter

Reverse Mortgage Assistance Pilot Program to Help Seniors Facing Foreclosure

Keep Your Home California announced a new pilot program to help low-and- moderate income senior homeowners avoid foreclosure on their reverse mortgages. Senior homeowners who are at risk of losing their home to foreclosure due to delinquent property expenses associated with their Federal Housing Administration (FHA) insured reverse mortgages could qualify for as much as $25,000 in assistance.

 

The Reverse Mortgage Assistance Pilot Program is intended to help financially distressed California homeowners 62 years or older who have a FHA Home Equity Conversion Mortgage (HECM). Used in conjunction with special counseling that provides services to enable senior homeowners to assess their overall budgetary health, this program is designed to help qualifying seniors manage their delinquent property expenses. These expenses include property taxes and homeowner's insurance, as well as up to 12 months of additional assistance for future property expenses to ensure homeowners get back on their feet.

 

The Reverse Mortgage Assistance Pilot Program is the latest expansion of Keep Your Home California, a free, federally funded mortgage assistance program managed by the California Housing Finance Agency (CalHFA).

 

"There are many senior homeowners who need a helping hand in order to get back on track with their reverse mortgage-related expenses," said CalHFA Executive Director Tia Boatman Patterson. "We don't want these seniors, many of whom live on a fixed income, to lose their homes because of some missed payments caused by a financial hardship beyond their control."

 

Click here to read the entire press release
Keep Your Home California Turns Four!

Keep Your Home California celebrated its fourth anniversary earlier this month. The four mortgage assistance programs were fully implemented on February 7, 2011 - and have been helping California homeowners prevent avoidable foreclosures ever since. The California economy and housing market has experienced a lot of change since 2011 and the Keep Your Home California programs have evolved with that change to continue to meet the needs of struggling California homeowners.

 

In last year's anniversary entry, we included a recap of the program improvements and expansions since inception. While we continued making changes this past year - most recently launching the Reverse Mortgage Assistance Pilot Program and expanding the Unemployment Mortgage Assistance Program to 18 months - we thought we would do things differently this year and look ahead. Below is a list of developments that we can look forward to in the next 60-90 days:
  • Eclipsing the mark of $1 billion in funding provided to homeowners since the program began;
     
  • Surpassing 50,000 California households who have qualified for assistance;

  • Bringing the total amount of Participating Servicers to over 220;
     
  • Making changes to program guidelines to help more homeowners qualify for assistance.
Funding
(as of Feb. 26, 2015)

Programs
  
Homeowners Assisted
Total Amount Distributed
Unemployment Mortgage Assistance
34,897 
$491,810,834.66
Principal Reduction Program
5,231
$314,232,134.63
Mortgage Reinstatement Assistance Program
8,422
$113,277,618.95
Transition Assistance Program
828
$2,951,169.47
Total Program
Funds Allocated
49,378
$922,271,757.71
Principal Reduction Program Benefits Available to Homeowners Who Received HAMP Modifications
Recently,  Making Home Affordable (MHA) issued guidance to clarify that homeowners who had previously received HAMP modifications and are in good standing (i.e., current on their payments) may receive Principal Reduction Program (PRP) benefits from Hardest Hit Fund programs and have their loans recast. This is an important decision for Keep Your Home California since prior guidelines did not allow for payment changes on loans with HAMP modifications in good standing.  Now, servicers may apply the PRP funds to the unpaid principal balance and reduce the homeowner's monthly payment based on the homeowner's existing rate and remaining loan term.  This is another way for homeowners to obtain lower payments, avoid foreclosure and remain in their homes.  

For more information about how Keep Your Home California can help homeowners who received a HAMP modification, please refer to this blog, which was posted in November 2014. Also, if you would like more information about a loan recast, please see the entry copied below, from our Frequent Questions web page.

 

What is a loan recast?

 

A recast is the process of applying funds to reduce the existing unpaid principal balance of a first mortgage loan. The homeowner's mortgage is not modified; the loan term and interest rate remain unchanged. However, recasting (re-amortizing) the loan based on the newly reduced principal amount will usually result in a lower monthly payment. Please refer to the hypothetical example below.

 

Before recast:

 

$250,000 owed; 20 year term, 5.75% rate = $1,755.21 monthly payment, 20 year term

 

Receive $100,000 through Keep Your Home California Principal Reduction Program to be applied to outstanding principal balance. Term and rate remain the same.

 

After recast:

 

$150,000 owed; 20 year term, 5.75% rate = $1,053.13 monthly payment, 20 year term

 

Note: As part of the loan recast process, homeowners are required to sign a Keep Your Home California Note, Deed of Trust and Benefit Award Letter prior to funding. Homeowners may also be required to sign a loan recast agreement with their servicer.

Recent Blog Post 

Facts and figures are the foundation for Keep Your Home California, from funding issued to the number of mortgage servicers participating in the program.

 

And the free mortgage-assistance program had another record year in 2014, with a record $340.3 million approved to help homeowners, about $33 million more than in 2013. In fact, about 38% of the dollars issued overall for the program were in 2014.

 

Read More 

Sucess Story: Daniel O.

When Daniel O. lost his full-time job, he was like most people - he worried, a lot.

 

"I didn't know what to do," says Daniel, who lives in the Los Angeles area.

 

Then, he came across a flyer about Keep Your Home California from... Read More 

Monthly Question & Answer

Reverse Mortgage Assistance Pilot Program approved expenses include delinquent property taxes and unpaid homeowner's insurance, flood insurance and homeowners/condo association dues, as required per the Deed of Trust. Servicers will be reimbursed for advanced expenses that meet Reverse Mortgage Assistance Pilot Program approved expense criteria.

 

See more frequently asked questions

To see all Servicer Scorecards, please visit the Participating Servicers webpage.
February 28, 2015
9:00am-6:00pm
Housing Fair
Oakland, CA
March 7, 2015
10:00am - 12:00pm
Mortgage Assistance Clinic
Los Angeles, CA
March 14, 2015
9:00am - 6:00pm
Home Preservation Workshop
Morgan Hill, CA
March 16, 2015
2:00pm - 8:00pm
Save Your California Home Workshop
San Bernardino, CA
March 21, 2015
8:30am - 4:30pm
Homebuyer Education Workshop
Oxnard, CA



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