Remember when principal reductions were resisted by banks and DeMarco? Now they are throwing money at people:
SACRAMENTO – Keep Your Home California announced today changes to help more low and moderate income homeowners, who are struggling with their monthly mortgage payments, remain in their homes as part of the free mortgage-assistance program.
The changes will assist homeowners who have suffered a financial hardship attain an affordable monthly mortgage payment and provide them with an opportunity to solve their mortgage troubles, before they fall behind on their payments.
For homeowners who have already fallen behind on their monthly payments, Keep Your Home California more than doubled the amount of funding that is available to help homeowners catch-up on past due mortgages. The state program, which is overseen by the California Housing Finance Agency (CalHFA), can provide up to $100,000 in assistance to eligible homeowners.
“Despite an improving economy and job market, there are still many homeowners who are struggling every month or just need a little help to get back on track with their payments,” said Tia Boatman Patterson, Executive Director of CalHFA. “Our goal is to help California homeowners prevent avoidable foreclosures, and the changes to the program are the latest in that effort.”
The program criteria changes affect the Principal Reduction Program, which allows homeowners with unaffordable monthly mortgage payments to apply for as much as $100,000 in assistance to reduce the principal balance. Principal reductions often lead to savings of hundreds of dollars each month on homeowners’ mortgage payments.
Wow! We’ve been going about this home buying process all wrong!!! Why scrimp and save for 20% down and pay all our debts on time to get our FICO over 800 when the government is giving away free money to those that get in over their heads!
We should just go out and buy that over-priced turkey and then when we can’t afford to make the monthly payments, we’ll just submit our application for free money!!!
They also increased the ‘relocation assistance’ from $3,000 to $10,000 for sellers who short sale:
https://www.hmpadmin.com/portal/programs/docs/hamp_servicer/sd1404.pdf
*Sigh* Who doesn’t love free money? To think I left my beloved CA because of the over-priced turkeys and wouldn’t be pulled in to that. For once, I’d love to see responsibility rewarded.
No debts, a FICO score I don’t even believe, and 20% DP, I guess, is just viewed as what responsible “suckers” do. At least I console myself that I was able to grab a 4% 30-year fixed mortgage on a house out-of-state in late 2010.
“Principal reductions often lead to savings of hundreds of dollars each month on homeowners’ mortgage payments.”
This is like saying your welfare check is really just a savings coupon you can use at any store that accepts them. This is a great deal for all prudent shoppers.
For criss sakes these people should just rent! Owning a house is for people who MAKE their payments. Enough already!
What do they think incentivizing those that don’t pay their mortgage will do?
Gov should be incentivizing those that do pay their bills. People that pay their bills also pay their taxes.