State Effort to Lower Home and Condo Foreclosures for Sale Numbers

by Simon Lindsay on Foreclosures

California has some of the highest numbers of residential and condo foreclosures for sale. According to real estate market analysts, most of the homeowners who lost their properties to foreclosure did so due to unemployment rather than readjusted mortgages.

In an effort to help jobless homeowners who are at risk of having their properties become one of the thousands of foreclosed homes in Los Angeles and in other areas of the state, the California Housing Finance Agency has launched the Keep Your Home forbearance initiative which aims to provide assistance to troubled homeowners who have already exhausted the benefits provided by the federal government's Making Home Affordable effort.

Homeowners who are facing California foreclosures can apply for a slot at the state program if they were still unable to find a job after they have used up the limited time provided under the federal program and if their lenders are participants in the state housing initiative.

Families and individuals who are facing possible loss of properties to bank foreclosed homes due to loss of job can also apply directly for a place at the state initiative without having to go through the federal program. The state effort is funded by money provided by the U.S. Treasury which totals $540 million.

The effort aims to help over 40,000 homeowners within two years and minimize the number of home and condo foreclosures for sale in the state. Initially, the program was designed to provide homeowners with a monthly monetary assistance worth $1,500 or half of the monthly loan payment, whichever is less.

However, state officials have recently decided to broaden the program following news that California will be receiving more funds from the federal government under the Treasury's Hardest Hit Program. California is set to receive a higher share of the monetary assistance compared with other states due to its high unemployment rate and larger population.

Officials from the state program revealed that California is planning to spend the funds to pay for part of unemployed borrowers' monthly loan mortgage dues. The assistance is expected to last up to six months, with participating lenders most likely to be required to delay collection of monthly loans during this period. Local officials hope that the program will help lower the number of residential and condo foreclosures for sale in the area.