By Aaron Glantz
The state of California launched a federally funded anti-foreclosure program today, nearly a year after President Barack Obama announced he was giving the California Housing Finance Agency $700 million to help those hardest hit by the collapse of the housing market.
Officials say the program could help more than 100,000 troubled borrowers.
“The program launched this morning and phones are open,” said Diane Richardson, the agency’s director of legislation. “The website has been updated.”
Since Obama’s announcement, federal support for the Keep Your Home California Program had ballooned to nearly $2 billion, while CalHFA had yet to accept a single application.
Advocates expressed guarded optimism at the development.
“It’s about time,” said Bruce Mirken, spokesperson for the Greenlining Institute, a social policy and organizing group in Berkeley. “These programs are desperately needed. We hope that they’ll move rapidly now because people are hurting out there.”
Keep Your Home California will eventually have four programs, including one that helps under-water borrowers reduce the principal they owe.
But Richardson said CalHFA is currently only accepting applications for one program, which provides temporary mortgage assistance to the unemployed.
Under that program, unemployed homeowners who wish to remain in their homes but are in imminent danger of foreclosure are eligible for up to six months of benefits with a monthly subsidy of up to $3,000 or 100 percent of a homeowner’s total monthly mortgage, whichever is smaller.
Most of California’s large mortgage bankers have agreed to participate in Keep Your Home California’s program to subsidize unemployed borrowers. But some, including the nation’s largest mortgage originator Wells Fargo, have yet to sign on for Cal HFA’s principal reduction program.
Company spokesperson Tom Goya said Wells Fargo is only willing to be part of a federal principal reduction program called the Home Affordable Modification Program (HAMP). “Participation in this program will enable us to deliver a consistent option to qualified borrowers in all 50 states without the states having to provide matching funds,” Goya said.