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Your Legal Corner - Client Alert Blog

California Keep Your Home Program 2011

Written By: Melissa C. Marsh, Esq., California Attorney, February 2011 Add to Favorites
California Keep Your Home Program -- $2-billion to help distressed homeowners

The State of California’s Housing Finance Agency (CalHFA) has started a new, federally funded, program called "Keep Your Home California". There are four parts to the program: (1) Unemployment Mortgage Assistance Program, which is available now; (2) The Mortgage Reinstatement Assistance Program; (3) The Principal Reduction Program; and (4) The Transition Assistance Program. These four programs are designed to assist low and moderate income homeowners (average annual earnings of less than $68,000 for a family of 4) retain their homes if they have suffered a financial hardship (unemployment, death, illness or disability, or are facing a recent or upcoming increase in their monthly mortgage payment and now are at risk of default because of this economic hardship and severe decline in their home's value). Only low- to moderate-income households can apply, and neither investors nor homeowners who did a "cash out" refinance are eligible. Under the UMA, qualifying low income California homeowners who are receiving unemployment benefits may qualify to have their mortgage paid for up to 6 months. Under the Principal Reduction Program (PRP), qualifying homeowners may receive up to $50,000 in principal reduction. Under the Transition Assistance Program (TAP), those who truly cannot afford to stay in their homes, may qualify for up to $5,000 in relocation assistance.

The first program, the Unemployment Mortgage Assistance Program (UMA), is available now. The UMA is designed to assist unemployed Californians pay their mortgage for up to 6 months. If you are an unemployed California homeowner, you may be eligible to receive up to $3,000 a month for up to six (6) months to help you keep your home while you find a job. The UMA provides mortgage payment assistance equal to the lesser of $3,000 per month, or 100% of the principal, interest, tax, insurance and escrowed homeowner’s association dues, if any, for up to six months.

UMA Eligibility Requirements. To be eligible for the Unemployment Mortgage Assistance Program, the homeowner / applicant must:

  1. Own and occupy (actually live in) the home as a primary residence;
  2. Have acquired his/her/their Original Loan on or before January 1, 2009;
  3. Be at imminent risk of default on the loan (loans that are 3 months or less delinquent still qualify, but loans already in foreclosure are not eligible);
  4. Be able to prove that the current unpaid principal balance on the loan is less than $729,750;
  5. have a low-to-moderate income, typically under $68,000 per year. (Check for income limits here);
  6. Be currently eligible to receive unemployment benefits from and in the State of California;
  7. Be able to prove the hardship (the homeowner must complete and sign a Hardship Affidavit/3rd Party Authorization documenting the reason for the hardship).
A homeowner is NOT eligible to participate in the Unemployment Mortgage Assistance Program if:
  1. The homeowner voluntarily resigned, or quit, his or her previous job;
  2. The homeowner’s mortgage payments are more than three payments delinquent;
  3. The homeowner is in foreclosure;
  4. The outstanding loan on the property exceeds $729,750;
  5. The homeowner is in bankruptcy;
  6. The homeowner owns any other real property;
  7. The property owned is vacant, abandoned, or condemned;
  8. The homeowner is not entitled to unemployment benefits from the California EDD, or the homeowner’s benefits will expire within 90 days of applying for the Program; OR
  9. The homeowner took a "cash-out" refinance on his/her/their first mortgage. Refinancing for the sole purpose of securing a better loan interest rate will not disqualify the homeowner, but if the homeowner took cash out it will. Please note that a stand-alone second lien, including a home equity line of credit (HELOC), is considered a "cash-out" transaction.
How to Apply. To apply for the UMA program, Call the California Housing Finance Agency at (888) 954-5337 between 7 a.m. to 7 p.m. Monday thru Friday, or Saturday from 9 a.m. to 3 p.m. Before you call, be sure to have the following information: (1) Proof of your current income, before and after taxes and deductions; (2) Proof of your current monthly expenses, including credit card bills; and (3) A copy of your mortgage statement that contains your loan number.

Mortgage Reinstatement Assistance Program (MRAP) MRAP is 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 up to 2 months delinquent to prevent potential foreclosures. These funds can provide benefits of up to $15,000 per household, available on a one-time only basis, per household.

Eligibility Requirements. To be eligible for the Mortgage Reinstatement Assistance Program (MRAP), the homeowner / applicant must:

  1. Own and occupy (actually live in) the home as a primary residence (the home must be a single family residence, or 1-4 unit home, in California and mobile homes are eligible if they are permanently affixed to the real property that is secured by the loan);
  2. Have acquired his/her/their Original Loan on or before January 1, 2009;
  3. Have an outstanding loan balance on the property less than $729,750;
  4. Have a low-to-moderate income, typically under $68,000 per year (Check for income limits here);
  5. Complete and sign a Hardship Affidavit/3rd Party Authorization;
  6. Be able to prove that he/she has adequate income to sustain the reinstated mortgage loan payments, with or without use of a loan modification per lender guidelines;
  7. Be able to show that their loan is at least 2 months delinquent, but not in foreclosure;
  8. Not own any other real property;
  9. Not be in bankruptcy; AND
  10. Able to prove that the property owned is not be vacant, abandoned, or condemned.
Principal Reduction Program (PRP)

This program seeks to provide capital on a dollar-for-dollar matching basis with participating lenders to reduce the outstanding principal balances of qualifying properties with negative equity. The eligibility requirements are the same as for MRAP (discussed above). Unfortunately as of February 9, only the following four loan servicers are participating in the PRP Program: (1) GMAC; (2) Guild Mortgage; (3) California Housing Finance Agency; and (4) California Department of Veterans Affairs. Other loan servicers, including Bank of America, JPMorgan Chase, CitiMortgage and Wells Fargo are currently participating in other California Keep Your Home Programs, but not the PRP program at this time. PRP will, in cooperation with participating lenders, leverage its dollars (up to $50,000) by reducing the principal balances of underwater mortgages.

Transition Assistance Program (TAP).

The TAP Program will provide homeowners who cannot afford to stay in their homes with relocation assistance up to $5,000. TAP will be used in conjunction with a servicer-approved short sale, or deed-in-lieu of foreclosure program, to help homeowners secure new housing (e.g., security deposit, rent, and moving expenses). Homeowners will be responsible to occupy and maintain the property until the home is sold, or returned to the loan servicer, as negotiated. It should be noted that NO funds will go directly to the homeowner. All funds will be sent to the Loan Servicer subject to the Loan Servicer/Investor’s approval of a short sale, or deed-in-lieu of foreclosure. Funds are intended to help the eligible homeowners on a one time basis secure new housing.

Eligibility Requirements. To be eligible for the TAP, the homeowner / applicant must: </b>

  1. Own and occupy (actually live in) the home as a primary residence (the home must be a single family residence, or 1-4 unit home, in California and mobile homes are eligible if they are permanently affixed to the real property that is secured by the loan);
  2. Have acquired his/her/their Original Loan on or before January 1, 2009;
  3. Have an outstanding loan balance on the property less than $729,750;
  4. Have a low-to-moderate income (Check for income limits here);
  5. Not own any other real property;
  6. Not be in bankruptcy;
  7. Able to prove that the property owned is not be vacant, abandoned, or condemned;
  8. Complete and sign a Hardship Affidavit/3rd Party Authorization; AND
  9. Agree to occupy and maintain the property until the home is sold, or returned.


Tags: California Keep Your Home Program, Keep Your Home, save your home
Posted In: Real Estate Reporter 


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Disclaimer: The information presented on this web site was prepared by Melissa C. Marsh for general informational purposes only and does not constitute legal advice. The information provided in my articles and alerts should not be relied upon, or used as a substitute for professional legal advice from an attorney you retain to advise or represent you. Your use of this Internet site does not create an attorney- client relationship. Transmission of this article is not intended to create, and receipt of it does not constitute, an attorney-client relationship. All uses of the contents of this site, other than personal uses, are prohibited. You may print or email a copy of any information posted on this web site for your own personal, non-commercial, use, but you may not publish any of the articles or posts on this web site without the Express Written Permission of Melissa C. Marsh.


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Located in Los Angeles, California, the Law Office of Melissa C. Marsh handles business law and corporation law matters as a lawyer for clients throughout Los Angeles including Burbank, Sherman Oaks, Studio City, Valley Village, North Hollywood, Woodland Hills, Hollywood, West LA as well as Riverside County, San Fernando, Ventura County, and Santa Clarita. Attorney Melissa C. Marsh has considerable experience handling business matters both nationally and internationally. We routinely assist our clients with incorporation, forming a California corporation, forming a California llc, partnership, annual minutes, shareholder meetings, director meetings, getting a taxpayer ID number (EIN), buying a business, selling a business, commercial lease review, employee disputes, independent contractors, construction, and personal matters such as preparing a will, living trust, power of attorney, health care directive, and more.