SACRAMENTO, Calif.--(BUSINESS WIRE)--Today, Keep Your Home California announced a new pilot program to help low- and moderate-income senior homeowners avoid foreclosure on their reverse mortgages.
Senior homeowners who are at risk of losing their home to foreclosure due to delinquent property expenses associated with their Federal Housing Administration (FHA) insured reverse mortgages could qualify for as much as $25,000 in assistance.
The Reverse Mortgage Assistance Pilot Program is intended to help financially distressed California homeowners 62 years or older who have a FHA Home Equity Conversion Mortgage (HECM). Used in conjunction with special counseling that provides services to enable senior homeowners to assess their overall budgetary health, this program is designed to help qualifying seniors manage their delinquent property expenses. These expenses include property taxes and homeowner’s insurance, as well as up to 12 months of additional assistance for future property expenses to ensure homeowners get back on their feet.
The Reverse Mortgage Assistance Pilot Program is the latest expansion of Keep Your Home California, a free, federally funded mortgage assistance program managed by the California Housing Finance Agency (CalHFA).
“There are many senior homeowners who need a helping hand in order to get back on track with their reverse mortgage-related expenses,” said CalHFA Executive Director Tia Boatman Patterson. “We don’t want these seniors, many of whom live on a fixed income, to lose their homes because of some missed payments caused by a financial hardship beyond their control.”
“California’s use of Hardest Hit Funds to assist distressed homeowners with reverse mortgages is an innovative approach to helping seniors having a difficult time cover some of their housing expenses,” said U.S. Treasury Chief Homeownership Preservation Officer Mark McArdle. “It’s important in our efforts to prevent foreclosures and stabilize communities that programs like this are available to help homeowners experiencing a temporary financial hardship avoid a permanent loss.”
Senior homeowners must meet the program’s county-by-county income limits and have endured a financial hardship – such as a reduction of income, a divorce, a death in the family or extraordinary medical bills – in order to qualify for assistance. Homeowners must also reside in the home subject to the reverse mortgage and be able to make required property expense payments on a go-forward basis.
Thousands of California seniors have utilized the FHA HECM product, and many of them have experienced a change in circumstance causing them to be in financial distress. There is a high concentration of homeowners with reverse mortgages in the Central Valley, the Chico/Redding region of Northern California and the High Desert in Southern California. These areas were greatly affected by the housing downturn and have suffered from a slower-to-recover economy in recent years.
“We are looking forward to working with Keep Your Home California on this unique program to help elderly homeowners,” said Joy Cianci, Senior Vice President of Credit Portfolio Management for Fannie Mae. “This is an innovative use for the Hardest Hit Fund that will help qualified seniors avoid foreclosure and stay in their homes.”
Keep Your Home California has reserved $25 million for the Reverse Mortgage Assistance Pilot Program and estimates about 1,400 homeowners could benefit from the program.
Homeowners who need assistance should contact their reverse mortgage servicer to begin the application process for the Reverse Mortgage Assistance Pilot Program. Currently, six reverse mortgage servicers are enrolled in the program - Champion, Financial Freedom, James B. Nutter, Residential Mortgage Solutions (RMS), SunWest and Wells Fargo.
All of the participating servicers are listed on the Reverse Mortgage Assistance Pilot Program web page, along with contact information for each of the servicers: www.keepyourhomecalifornia.org/reverse-mortgage-assistance-program/. More reverse mortgage servicers are expected to participate in the program soon.
Keep Your Home California was established in 2011 after the state received nearly $2 billion from the U.S. Treasury’s Hardest Hit Fund. Over 49,000 homeowners have received a total of $920 million from the federally funded program. To learn more about all of the Keep Your Home California programs, please visit www.KeepYourHomeCalifornia.org. A Spanish language version of the website is also available at www.ConservaTuCasaCalifornia.org.
