More people now qualify for federal and state funds that could reduce the amount they owe on their mortgages.
Housing Counselors at the South Bay Homeownership Fair had encouraging news for homeowners on at a gathering on Saturday.
Access to a $2 billion fund called Keep Your Home California is now easier, so more people qualify for federal and state funds that could reduce the amount they owe on their mortgages.
“If any homeowner ever refinanced their property, took any cash out, again, they were barred from the program. I'm happy to say that as of last Monday, that restriction was removed,” said Ali Tarzi of Community Housing Works.
Tarzi counsels struggling homeowners at the non-profit Community housing Works. He said about one in ten homeowners were turned down for the principal reduction program because they didn't qualify.
He's now eager to go back to past cases and get people's loan amounts reduced.
“It's up to $50,000 from the state housing finance agency for one household, “ said Tarzi, “and the bank will match that in $50,000 in principle reduction if the homeowner qualifies.”
The relaxed rules are likely to help Louis Maldonado. Maldonado was recently laid off and then retired and he said a fixed income doesn't cover the bills. “I could just barely afford payment on the property,” said Maldonado.
So far, only Bank of America, GMAC and Guild Mortgage have signed up for the program, however Tarzi said more lenders are likely to join.