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Government Program to Help Struggling Homeowners is Struggling, Too

According to a new series from California Watch, a small fraction of the eligible participants have received help from the $2 billion program.

 

Affordable housing is a and across the Bay Area.

Some North Bay residents are against state and regional housing authorities that are forcing cities to plan ahead for growth.

The people who are eligible for affordable housing have access to a $2 billion government program called Keep Your Home California.

It must be popular because there is a prominent message on its website saying, "Please note that we are currently experiencing extremely high call volumes and wait times may be longer than usual. Your patience is appreciated."

But more than two years after President Barack Obama announced the delivery of the first $700 million installment for the initiative, the California Housing Finance Agency, which administers the program, has spent just 5 percent of the money — $93 million, according to the agency’s most recent filings with the U.S. Treasury Department.

That was the conclusion of a new investigative report by California Watch, an award-winning initiative run by the nonpartisan Center for Investigative Reporting.

Cal Watch concluded that fewer than 8,000 borrowers have received help out of 101,337 Californians the agency estimated would receive assistance in an agreement with the federal government 18 months ago. 

Keep Your Home California is designed to subsidize mortgage payments for unemployed borrowers and reduce debt for people whose homes significantly declined in value during the housing crisis. But the program’s success relies on the goodwill of the banking industry, and most are balking at rewriting mortgage agreements, Cal Watch said.

At the same time, the program has eaten up an unusually large portion of its fund to create and promote the largely unsuccessful program. Of the nation’s five largest mortgage servicers, only one, Bank of America, is participating in the principal reduction program.

Click here to read Cal Watch's main story by Aaron Glantz.

Click here for a story about how a Texas firm targets California homeowners with foreclosed second mortgages.

Click here for a story about how a plan to plug the state budget with foreclosure settlements has sparked concern.

Never heard of California Watch? It's filling the gap as publications cut back on unbiased investigative reporting. Learn more here.

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