More Help for Homeowners: CalMatters

In summary

The state is extending mortgage relief to more California homeowners who are battling the pandemic. The program now covers second mortgages and loan deferments, with a maximum total grant of $80,000.

Angela Morrow had only been eight months into a new career as a flight attendant when she was laid off from her job due to the COVID-19 pandemic, putting her at risk of losing her three-bedroom, two-bathroom home in San County. Bernardino.

Morrow, 63, said he was able to save his Bloomington home through the $1 billion California Mortgage Relief Program, which allowed him to pay off more than $54,000 in mortgage debt, relief that lowered his long-term monthly payments.

“Receiving that grant has been a monumental blessing for me,” Morrow said. “It created a strong foundation for my children and their future, after I am gone.”

Today, state officials will announce that they are expanding who is eligible for the program, including some who have taken out second mortgages.

With $300 million already awarded to 10,000 homeowners, up to $700 million in aid remains available to borrowers who qualify for the program, which was created in December 2021 using federal Bailout Act dollars.

The expansion comes as state officials say the pandemic-era housing market, characterized by an uncertain economy, high home prices and now higher mortgage interest rates, could still put homeownership in jeopardy. the Golden State, particularly for low- and middle-income families.

Less than 56% of Californians live in their own or family homes, the second lowest rate of any state and just slightly higher than New York’s.

“People should not be penalized and lose something they have worked so hard to obtain, and lose that opportunity for generational wealth, due to circumstances beyond their control,” said Rebecca Franklin, president of the Housing Finance Agency. Of California. Relief Corp., which administers the mortgage relief program. “That’s what this show is about: bringing people up to speed, erasing that long-term financial impact that the pandemic may have had on them.”

California foreclosures remain at one of their lowest rates in two decades, with just 0.12% of homes in foreclosure as of last November, the most recent monthly data available, according to housing data firm CoreLogic. . That compares with a high of 3.21% for homes in November 2010, during the last housing crisis. Yet California families faced financial hardship during the pandemic, CoreLogic data shows, with 3.72% of all households severely delinquent as of August 2022, a recent high.

The difference in the pandemic economic downturn, state officials and experts said, is that mortgage companies and banks were willing to work with borrowers to defer payments and create additional home loans. High home prices can also help prevent foreclosure, as homeowners are often able to sell their properties. But with high rents, selling is often not a good option for families, said Lisa Sitkin, a senior attorney with the National Housing Law Project, a nonprofit that advocates for low-income households and renters.

Under the California Mortgage Assistance Program Expansion that was featured today at a Sacramento nonprofit:

  • Eligible homeowners who have already used the program and need additional assistance can reapply, for up to $80,000 in total grants.
  • Homeowners can use the program to pay off second home loans or loan deferments they negotiated in the midst of the pandemic.
  • The program will also be available to homeowners with properties of up to four units, as long as those small owners live in those properties.
  • While the program was previously only available to people who had missed at least two mortgage payments and at least one property tax payment before last summer, it will now be available to those homeowners through March 1.

“People should not be penalized and lose something they have worked so hard to obtain, and lose that opportunity for generational wealth, due to circumstances beyond their control.”

Rebecca Franklin, president of the California Housing Finance Agency Homeowners Assistance Corporation.

The program includes income and wealth restrictions. Individuals can only receive assistance if their combined household income is no more than 150% of the median income for their region. Households that have cash or other assets worth $20,000 more than the total funds they are applying for are disqualified. (For more information, there is a help page.)

The aid program is administered at the national level by the US Treasury Department, which relies heavily on individual states to distribute the money. When it comes to California’s record in obtaining funds for borrowers, the state has been “agile” and “responsive,” said Sitkin of the National Housing Law Project, which is monitoring all state programs.