INDUSRTY UPDATE: Four Foreclosure Avoidance Programs Under "Keep Your Home California"

(Information taken from Keep Your Home California blog)

Cash-strapped homeowners who want to avoid foreclosure have four programs under Keep Your Home California, each with thousands of dollars available – and in some cases as much as $100,000.

The federally funded, state-run effort established the four programs after input from community leaders statewide. Quite simply, we wanted to know the best way to put almost $2 billion to work for low and moderate income families in the Golden State, from El Centro to Crescent City.

Each program caters to specific needs, such as jobless homeowners looking for help with the mortgage for a few months while they find work to those needing to reduce loan principal to make their payments work. And, like most efforts, you need to find the program that best fits your needs.

We’ll go over the basics of each of the four programs, but we strongly encourage you to contact our customer-service reps who can check if you are eligible, determine the best program for your needs and start the process.

Below is an overview – all the detailed information is available at, including a seven-minute video on the process.

Also, please remember that some homeowners are eligible for multiple programs. When you apply and begin the process, representatives can answer questions about eligibility and determine if multiple programs – and more funds – are possible.

Unemployment Mortgage Assistance Program – Out of work and need some money for the mortgage payment? Well, maybe we can help. Keep Your Home California will provide as much as $3,000 or the combined monthly payment of principal, interest, taxes insurance and homeowners’ association dues, whichever is less, for a maximum of six months. Of course, there are some requirements, including that you must be receiving unemployment benefits from the California Employment Development Department.

Mortgage Reinstatement Assistance Program – Homeowners behind on their mortgage – including interest, taxes, insurance and homeowners’ association dues – can receive as much as $15,000 to help get back in step on the payments, a huge help for consumers with a short-term issue that affected their income. Homeowners must also prove they can afford the mortgage payment once it’s reinstated, otherwise we are creating a situation for failure – and that’s not good for anyone, from the homeowner to the lender. Some homeowners can combine this program with California Housing Finance Agency’s Loan Modification Program. More than $129 million has been earmarked for this program.

Principal Reduction Program – This program is like going on a fiscal diet, trimming your mortgage principal balance. How much of a cut to the mortgage principal depends on additional Keep Your Home California assistance funds (yes, you can get dollars from other programs mentioned above). Note: like all of our programs, your mortgage servicer must be participating in Keep Your Home California for this to work for you. Unfortunately, this program has been the most difficult to get mortgage servicers to participate in. Check our list of servicers to see if your servicer is participating.

Transitional Assistance Program – We realize that sometimes it’s best for people to transition to another type of housing. So, when it comes to getting back on track for homeowners who avoided foreclosure through a short sale or deed-in-lieu of foreclosure, maybe we can help. The Transitional Assistance Program offers as much as $5,000 for families to find a new place to live.

The information above is intended only as an overview. Their website,, has all the details.

Or you can simply call one of their counselors at 888-954-5337 to get more information and check eligibility.

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