From the latimes.com:
A $7.6-billion federal program to help unemployed homeowners stave off foreclosure has provided little relief two years after being unveiled, with less than $218 million of the money paid out to needy borrowers as of Jan. 1.
California, which was allocated nearly $2 billion from the Hardest Hit Fund, provided less than $38.6 million in assistance for 4,357 borrowers by the end of last year, according to the state’s latest report to the Treasury Department.
That amounted to less than 2% of the federal funds available to the state’s Keep Your Home California program.
“It’s about helping the homeowner, and that’s not happening,” said Bruce Marks, head of the foreclosure counseling group Neighborhood Assistance Corp of America. “As we speak, there are thousands of people losing their homes.”
State officials said another reason for the program’s poor performance was that lenders would not go along with a plan to write down mortgage balances.
California, Nevada and Arizona jointly devised a plan to provide mortgage relief funds to struggling borrowers only if banks and loan investors agreed to reduce the principal owed on the loan by a matching amount. For instance, a $25,000 principal reduction from the lender would be doubled, producing a $50,000 benefit to the borrower.
State officials say banks, loan investors and the government-owned mortgage giants Fannie Mae and Freddie Mac declined to go along with the plan.
“I think the biggest reason is the banks are not participating in the principal-reduction piece,” said Diane Richardson, legislative director for the California Housing Finance Agency, which developed the state’s program. “They are choosing not to participate for whatever reason.”
California is now considering helping homeowners without lender participation, state housing agency spokeswoman Evan Gerberding said.
“I think the biggest reason is the banks are not participating in the principal-reduction piece,” … “They are choosing not to participate for whatever reason.”
Apparently it’s a mystery to Ms. Richardson why banks aren’t eager to book losses. One possible answer shows up just below:
“California is now considering helping homeowners without lender participation …”
Just wait them out.
Does anyone know anybody that lost their house that they REALLY wanted to keep? Seems to me that people are happy with the free rent program and by the time they leave they are happy to get away from the crappy built mcmansion.
(I suppose one group not included in this mind-set might be HELOC people that lost a job and the HELOC caused them to lose the house that they had for several years)
But nowadays the stories seem to be more about people that couldn’t care less about a program “out there” that could help them stay in their underwater chinadrywallstickbox.
How about we finally have a program for struggling renters? 25k from the government plus 25k from my landlord could go a long way to stimulate the economy.
Here’s how I would distribute the rest. $7B lottery. Every mortgage payment buys one ticket.
We looked at several homes built during the past 10 years when we moved here. We didn’t buy one at the prices they were selling for then and wouldn’t at the prices they’re listed for now. The 20-year old place we bought has enough problems already that we never saw in older homes we owned up north (most of them resulting from the poor water quality that seems to beset most of SD County – exactly WHAT is in the water here that turns toilet bowls BLACK if they go unused in a vacant house???).