Help From the State of California to Avoid Home Foreclosure
The Department of Housing and Urban Development (HUD) has allocated funding to states hit the hardest during the housing market downturn. California has been identified as one of these states. Many programs offered through the State of California can be used in conjunction with the federal Making Home Affordable foreclosure prevention program. California state laws have also been revised to assist homeowners facing foreclosure.
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California Foreclosure Prevention Act (CFPA)
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In 2009, Governor Arnold Schwarzenegger signed the California Foreclosure Prevention Act (CFPA) that gives additional time for a homeowner facing foreclosure to have a loan modification approved. A homeowner is given an additional 90 days to obtain a loan modification before a notice of foreclosure sale can be issued. If the homeowner has already received a notice of sale, he will not be granted the 90-day extension. The home must be his primary residence and the loan must have been originated from January 1, 2003 and January 1, 2008.
Keep Your Home California Programs
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The California Finance Housing Agency administers four programs for homeowners facing foreclosure. The Unemployment Mortgage Assistance (UMA) assists homeowners who have experienced a decrease in income with $3,000 for up to 6 months to go towards mortgage payments. The Mortgage Reinstatement Assistance Program (MRAP) provides up to $15,000 towards mortgage payments in arrears to eligible homeowners. The Principal Reduction Program (PRP) provides up to $50,000 per qualified households to go towards reducing the outstanding principal balance over a 3-year period. The Transition Assistance Program (TAP) provides up to $5,000 for homeowners to secure new housing.
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Military HAP Benefits
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Qualified service members who have received orders to relocate and need to sell their home are provided on average $95,444 per household. This reimbursement is from the government for the loss taken from the sell of a home during the housing market downturn. To qualify for the program, the service member must have purchased her home before June 30, 2006 and experienced a 10 percent decrease in home value. The U.S. Army Corps of Engineers, Sacramento District is administering the HAP program for California.
Counseling Services
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HUD has approved counseling centers across California to provide guidance on foreclosure prevention. These centers offer classes or seminars that explain the foreclosure process. A homeowner can also set an appointment to speak with a housing counselor. The counselor will do an assessment of the homeowner's finances. They can contact lenders on the homeowner's behalf and try to negotiate for a forbearance and repayment plan. Some foreclosure prevention programs may require the homeowner to receive housing counseling as a condition of the financial assistance.
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