Thanks to daytrip for sending this in from the latimes.com:
Borrowers have faced major hurdles in trying to access the aid. Joshua and Catherine Brewster sought help after Josh lost his job as a legal assistant at Hilton Hotels when a reorganization moved his division out of state.
They battled for a year for a modification from their servicer, Bank of America, to help with their $2,300-a-month mortgage payment. Then they got transferred to the state Housing Finance Agency.
Many additional battles over the loan terms followed, they said, before the Keep Your Home California program approved $47,000 in principal reduction. Their interest rate also was cut to 3.75%, and in January payments fell to $1,676 a month, which they say they can handle.
“We had to fight,” Josh said. “People are not conditioned to challenge the banks. It was brutal.”
State officials said they hope to hear fewer such stories as the pipeline of loan modifications swells, mainly because Bank of America, Wells Fargo Bank and Chase Bank — the biggest providers of mortgage customer service — all have now agreed to use the funds for principal reduction.
Bank of America began doing Keep Your Home California principal reductions in March 2011. But many banks, including Wells and Chase, were slow to sign on, in large part because Fannie Mae and Freddie Mac were opposed to lowering the balance owed on mortgages. Wells and Chase began writing down loan balances this year.
“We have the funding to help many, many more homeowners with our free assistance,” Claudia Cappio, head of the California Housing Finance Agency, said in a statement Monday. She encouraged anyone having difficulty with their mortgage to call the program at (888) 954-5337.
Borrowers seeking principal reductions must show that they owe more than their homes are worth and also must show that they are financially troubled — a requirement that has proved problematic, Richardson said.
“I still think [the money] should be flying out the door, and it’s not,” she said. “People have a hard time documenting hardship.”