Keep Your Home California (KYHC) is designed to help low/moderate income families stay in their homes. In fact, the US Treasury Department approved $2 billion in federal funds for California families that are struggling to pay their mortgage.

It sounds like a well-intentioned idea. However, as many people know, getting actual help with mortgage problems is not easy. Qualifying for any government program doesn’t seem to be a walk in the park either.

Because the program is very new, it is hard for me to have any sort of “expert” opinion on the matter. However, on its face, the program has many requirements families must meet. These requirements would effectively disqualify most of my current clients for one reason or another.

I am a realist and I understand that while $2 billion is a significant sum of money, the program had to have limits in order to both preserve the funding for people that need it most, but also to provide some non-discretionary ways to measure who would qualify. While the people that designed the program understand that many will not qualify, they are not willing to expand the program to a case-by-case basis. However, if there is money remaining they will consider petitioning to allow help for additional homeowners who don’t qualify for the program as it stands now.

Let’s go through some of the requirements:

• Low/moderate income (in Los Angeles County – $ 75,600)
• A financial hardship – change in circumstances, like loss of job or death/illness
• Property must be in CA
• Can only own 1 property
• Your mortgage must have been originated on or before January 1, 2009
• Your mortgage cannot exceed $ 729,750
• A cash-out refinance of Home Equity Line of Credit is not allowed.

It is also my understanding that there is a limit on the amount of arrearage that they are willing to work with and that limit is around $15,000.

The biggest hurdle is that your mortgage servicer needs to agree to participate in the program.
Right now only the following servicers have agreed to participate in the program: http://www.keepyourhomecalifornia.org/participating.htm

It’s easy to talk about all the reasons why this program will not be effective and how many “deserving” people will be left out of the program. However, I support any program that is not ran by scummy (yes, a legal term) mortgage modification people who ask for money up-front or even well-intentioned, but poorly informed people that promise to help without having the proper qualifications.

This program has clear guidelines. People that will be answering the phone are not profiting from your misfortune. To me, that alone is reason enough to not criticize the program and be on the lookout for people that can potentially benefit from it.

To get detailed information on Keep Your Home California, go to www.keepyourhomecalifornia.org

If you have other debts and/or don’t qualify for any mortgage modification programs, call me to discuss if bankruptcy may be a good option for you.