We posted an item last month about the federal government’s plan to give $2.1 billion to 10 states – California is one – to come up with unique ways of stemming the tide of foreclosures.
The California plan has been turned in, and CNNMoney.com reports on the details:
California, which will receive $699 million to help an estimated 38,095 people, is proposing to pay 50% of an unemployed borrowers’ mortgage, up to $1,500, for as long as six months. For borrowers who are able to resume making payments but are saddled with arrearages, the state will cover up to $15,000, or 50%, of the amount owed, as long as the servicer matches.
The Golden State will also pay off up to $50,000 of an underwater homeowner’s mortgage as long as the servicer matches. And, for those who can’t afford to stay in their homes, the state will provide up to $5,000 to help the borrower find new housing.
Borrowers must be delinquent or in imminent default, but have adequate income to sustain modified mortgage payments. They must live in their homes and the loan cannot exceed $729,500.
More than 216,000 homes in California received a foreclosure notice in the first quarter of 2010, which equaled 23% of the nation’s total, according to RealtyTrac, an online marketplace of foreclosed properties.
For the full article, go here.