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The California State government has a plan to help homeowners avoid foreclosure and stay in their homes.
Well it’s not exactly giving it away, but improbably the state of California does have $2 billion stashed away with the goal of helping more than 100,000 struggling homeowners avoid foreclosure. The $2 billion comes from the federal government, stashed away by California in 2008, as part of the TARP financial bailout and is only now being rolled out under a state program called “Keep Your Home California.” The program relies on banks working with the state and homeowners to help renegotiate mortgage terms in return for a generous incentive, but similar ideas have been tried in the past three years with little success. California’s plan is actually four separate approaches, the biggest part allocating $875 million in temporary financial help to people who have lost their jobs to help them cover their home payments. Another part of the plan would provide as much as $15,000 per homeowner to help them get current on mortgages. It’s ambitious and it sounds promising but there’s a lot of uncertainty—can “Keep Your Home California” actually keep Californians in their homes?
Steven Spears, executive director of the California Housing Finance Agency (CalHFA), the agency running the Keep Your Home California program
Lisa Sitkin, staff attorney for Housing and Economic Rights Advocates, a California statewide, not-for-profit legal service and advocacy organization. Their core practice areas are predatory or unfair mortgage lending, foreclosure prevention and fair housing.