Here is an article from today's L.A. Times with the following headline: "
California plans $2 Billion program to help distressed homeowners." And here are details and quotes from the article:
"The Keep Your Home California program, which uses federal funds reserved for the 2008 rescue of the financial system, has the potential to make a sizable dent in California's foreclosure crisis and help the general housing market. State officials hope to fend off foreclosure for about 95,000 borrowers and provide moving assistance to about 6,500 people who do lose their homes." Sounds great, right?
But wait. Apparently the banks aren't rushing to get on board. "Out of the five major mortgage servicers — Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., Ally Financial and Citigroup Inc." only Ally Financial is on board.
And free-market proponents won't like this: "By keeping some cheap foreclosed properties from reaching the market, the program could give a boost to home values in general."
More details: "The biggest of the plan's four parts allocates $875 million as temporary financial help to people who have seen their paychecks cut or have lost their jobs, providing as much as $3,000 a month for six months to cover home payments and associated costs. The second-largest chunk of money, $790 million, is slated for a principal reduction program that would write down the value of an estimated 25,135 underwater mortgages.
Another piece would use $129 million to provide as much as $15,000 apiece to help homeowners get current on their mortgages, and another would take $32 million to provide moving assistance for people who can't afford to remain in their homes."
To qualify in L.A. County, a family could not earn more than $75,000 annually. Yes, that's a lot. I predict that, just as they
are not doing now, the banks just won't get on board. And foreclosure help will continue to elude many homeowners.
