California Homeowners Receive Additional Foreclosure assistance

The Obama Administration today announced additional support to help homeowners struggling with unemployment through two targeted foreclosure-prevention programs--the existing Housing Finance Agency (HFA) Innovation Fund for the Hardest Hit Housing Markets and the soon-to-be-launched U.S. Dept. of Housing and Urban Development (HUD) Emergency Homeowners Loan Program. Through the Hardest Hit program, California will receive an additional $476 million to assist homeowners struggling to make their mortgage payments due to unemployment.

The Emergency Homeowners Loan Program will provide assistance to homeowners by offering eligible borrowers a declining balance, deferred payment “bridge loan” (zero percent interest, non-recourse, subordinate loan) for up to $50,000 to assist with payments on their mortgage principal, interest, mortgage insurance, taxes, and hazard insurance for up to 24 months.

Under the program, eligible borrowers must:

• Be at least three months delinquent in their payments and have a reasonable likelihood of being able to resume repayment of their mortgage payments and related housing expenses within two years;
• Have a mortgage property that is the principal residence of the borrower, and eligible borrowers may not own a second home;
• Demonstrate a good payment record prior to the event that produced the reduction of income.

HUD will announce additional details, including the targeted communities and other program specifics when the program is officially launched in the coming weeks.