California foreclosure-relief program to get hundreds of millions in new funding
A California program intended to prevent home foreclosures that was expected to shut down next year is instead being expanded and extended following a new influx of federal funding.
Keep Your Home California, which already had been awarded nearly $2 billion, will receive up to $463.5 million in additional federal money to aid troubled borrowers.
The program has assisted 54,010 California homeowners as of Sept. 30, according to the U.S. Treasury Department.
Treasury announced the increase Friday as part of a $2-billion expansion of its Hardest Hit Fund, which launched in 2010 and earmarked $7.6 billion to 18 states and the District of Columbia.
California will receive about $213.5 million in the first distribution of new funding. The state could get an additional $250 million in a second phase, which the department expects to award by the end of April.
Keep Your Home California offers monthly mortgage assistance to the unemployed or underemployed, as well as principal reduction and other assistance.
Treasury Secretary Jacob J. Lew said the expansion is “next step in the administration’s effort to help struggling homeowners recover from the financial crisis, and strengthen the housing recovery.”
The program, however, has been criticized for a slow distribution of funds.
Steve Gallagher, a Keep Your Home California spokesman, said that program tweaks and increasing familiarity with the program have sped up the process.
California has now spent 71.5% of its available funds to homeowners, Gallagher said. That’s up from 48.4% as of the end of 2014.
The federal expansion was authorized as part of the massive $1.1-trillion federal funding bill Congress passed in December.
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