On Dec. 20, CAL LEG received approval for mortgage relief program.
Governor Newsom announced approval by US Treasury of California’s plan to provide mortgage relief grants to homeowners who have fallen behind on housing payments.
Also relief grants to homeowners with reverse mortgage arrearages during pandemic.
CAL mortgage relief program will help 20k-40k struggling homeowners, with funds reserved for those in socially disadvantaged, underserved communities hit hardest.
Full mortgage relief program will launch in coming weeks; will be largest in the nation.
Mortgage Relief Program
Through the mortgage relief program, past due housing payments up to $80k will be covered in full with a direct payment to qualified homeowners’ mortgage servicers.
Financial support is provided as one-time grant that qualified homeowners will not have to repay, so that homeowners can get caught up and have a fresh start.
Funding is allocated through American Rescue Plan Act’s homeowner assistance fund.
Will be part of State housing is key program; will work in tandem with existing state, federal initiatives, programs to support residents facing difficulties due to pandemic.
Single-family, condo, or manufactured homeowners at or below 100% of their county’s area median income, who faced financial hardship after Jan. 21, 2020, may be eligible.
Mortgage Relief Program accept applications in coming weeks through online portal.
Jan. 2022 CAL DFPI Program Participation
On Jan. 6, 2022, CAL DFPI highlighted efforts that urged participation in the mortgage relief program and forge a national model to protect homeowners impacted by Covid.
CAL DFPI required mortgage servicers to report how they would be protecting homeowners through increased staffing, mitigation efforts, State and federal relief.
All 362 licensees responded to the request, providing a 100% response rate from servicers managing a total of more than 4.6mn mortgage loans amounting to $1.4trn.
86% reported that they have appropriate policies and procedures in place to protect homeowners; 76% noted they added staffing to help homeowners avoid foreclosure.
Servicer participation in the California mortgage relief program is at 83% capacity.
Encouraged servicers who have not signed up for the relief program to participate.
Feb. 2022 CAL AG Program Participation
On Feb. 3, 2022, CAL AG Bonta sent a letter to key mortgage servicers urging the companies' immediate and full participation in the California mortgage relief program.
Program will distribute $1bn in federal homeowner assistance funds to homeowners experiencing COVID-related hardships get caught up on their mortgage payments.
The mortgage servicer must participate in the program for a borrower to be eligible for relief; 40k low- to moderate-income homeowners in CAL may be eligible for relief.
Attorney general also called on mortgage servicers to notify California borrowers of the program and share information on how they can submit applications for assistance.
Apr. 2022 Urged Application, Program Ends 2025
On Apr. 13, 2022, CAL AG highlighted California mortgage relief program, urged struggling homeowners to check eligibility to obtain free financial assistance.
Program uses $1 billion in federal Homeowner Assistance Funds to assist to low to moderate income homeowners behind on housing payments due to COVID-19.
While there is no strict application deadline, the program will remain open until all the funds have been allocated, with an end date projected to be some time in 2025.
Regulators
CAL DFPI; CAL LEG
Entity Types
Bank; CNSM; CU; MG Orig; Servicer; Thrift
Reference
CAL AG: PR, 4/13/2022; PR, Lt, 2/3/2022; CAL DFPI: PR, 1/6/2022; CAL LEG: PR, 12/20/2021; COVID-19
