By Sabrina Ortiz & Stuart R. Simone

Foreclosure

If you are a homeowner behind in your payments, in default, or facing a foreclosure sale date, this is big news.  Unfortunately, it is not good news.  Homeowners who have missed more than a couple of mortgage payments are in a terrible bind, because mortgage lenders legally can refuse to accept anything less than a single lump sum full reinstatement payment, and very few borrowers have the ability to pay tens of thousands of dollars in one payment.  Keep Your Home California was the California government program set up as a result of the National Mortgage Settlement, and it gave homeowners in this situation loans so that they could reinstate their mortgages and avoid foreclosure.  Now that this option is gone, borrowers who are facing foreclosure only have the options of (1) crossing their fingers and submitting a loan modification application, (2) filing for bankruptcy (usually Chapter 13) or (3) filing a civil lawsuit against their lender if they want to keep their home.

To reduce losses suffered by homeowners victimized by deceptive practices during the mortgage and foreclosure crisis, California’s Attorney General Kamala Harris obtained broad-ranging settlements from three major banks Bank of America, Citibank and JPMorgan Chase & Co in 2013 and 2014 related to the packaging, marketing, sale, and issuance of residential mortgage backed securities. While each is different, all of the settlements were used to provide reductions in principal balances, reductions in interest rates and other relief to qualified homeowners. The settlements also appointed monitors to oversee the banks to make sure they comply with settlement terms.  Most important, over $2 Billion – called “The Hardest Hit Funds” – were provided to the state of California to set up a free junior mortgage program to help borrowers avoid foreclosure.

Not every homeowner qualified for relief under the settlements. Those who qualified were contacted directly by their bank or servicer and may have received one or more forms of relief depending on their circumstances.  People would check their eligible for a loan modification, refinance, short sale or other foreclosure prevention relief under the settlements.

Keep Your Home California, the free junior mortgage program, helped over 82,000 California homeowners. While much of the assistance consisted of secured loans (where the liens would eventually fall off), KYHC also provided the Unemployment Mortgage Assistance Program (“UMA”) which payed unemployed borrowers each moth equal to the lesser of $3,000 per month or 100% of the PITI of their mortgage.  The demand for the programs remained strong until the end, even with a much-improved economy and housing market during the past couple years. The Keep Your Home California program accepted its last application on June 29, 2018 because all of the “Hardest Hit Funds” that were provided to the State of California to prevent foreclosures (over $2 billion dollars) were provided to approved homeowners or are committed to qualified homeowners in process. The program, once closed, cannot re-open.

Everyone who was approved for a Keep Your Home California program before the June 29th, 2018 deadline will continue to receive assistance.  UMA monthly benefit payments will continue as scheduled. If a homeowner becomes re-employed during this time period they are receiving UMA assistance, they are required to contact Keep Your Home California to discuss their benefit payments. Even though the program has closed, homeowners who have questions and want to discuss or appeal an ineligible decision letter should contact Keep Your Home California at 888.954-5337, Monday-Friday from 8:00am to 5:00pm.

Although Keep Your Home California has expired, the law firm of Gomez & Simone is still here to provide legal assistance to homeowners struggling to keep their homes.  Are attorneys are experienced in civil litigation, negotiation and bankruptcy and have saved dozens of borrowers from losing their homes.

Gomez & Simone is a full service real estate law firm representing families and business people, homeowners and renters, landlords and tenants, with offices throughout Southern California.  This article is informational only and should not be used as legal advice.  Please note that laws may have changed since this article was published.  Before taking action, we recommend that you consult with one of our attorneys about your specific matter.  Please contact your local Gomez & Simone office or call us at 1-855-219-3333 or by email at info@gomezsimonelaw.com.  Attorney advertising.