Love's Real Stories

“Keep Your Home California” is a state-run program paid for by the U.S. Treasury Department’s “Hardest Hit Fund”, a 2 billion dollar program. We’ve received a big response from people with questions about the program, and from people who sent us their success stories from working with the program, we’re running some of the information again:

Keep Your Home California has four parts:

• Mortgage help for the unemployed.
• Mortgage help for people with “documented financial hardship.”
• Relocation help for people in the midst of a short sale.
• Reduction of principal balance on mortgages.

Keep Your Home California has helped close to 8,000 low- and moderate-income households that are behind on loan payments or close to default, according to agency leaders.

The program has recently made changes in eligibility guidelines, opening up help to more people.

“This expanded eligibility will allow more families to qualify and receive greater assistance,” said California Housing Finance Agency Executive Director Claudia Cappio. “We are continually evaluating our experience, and making adjustments like these based on the initial results of the Keep Your Home California program.”

The new changes include:

• Allowing homeowners who completed “cash-out” mortgage refinancing to take part in the four programs.
• Allowing borrowers who own more than one property to apply. Program officials said this will be particularly helpful to those who co-signed on properties for family members.
• Offering mortgage aid to unemployed borrowers for nine months, instead of six. Such homeowners can get up to $3,000 a month. To qualify, you must receive unemployment benefits.
• Reinstating up to $20,000 in past-due mortgage payments instead of the previous $15,000 cap.

Most lenders, but not all, participate in the Keep Your Home California program. For a list, go to www.keepyourhomecalifornia.org/participating, or call 888-954-5337.

Good luck to you who might benefit from this program. I’d love to hear your experiences.

“I admit it. I’m a strategic defaulter,” said James Logan. That is, Mr. Logan lost his home through foreclosure- on purpose. He quit making payments to the bank, and walked away when the bank took the house.

“Yeah, I walked away, but it took a while,” said Logan.

Two years. Logan lived in his house, rent-free, and saved the money, for two years.

“Hey, I tried hard to keep my house. I fought the good fight for years. But my take-home pay kept shrinking and my bills kept growing. I cut expenses down to zilch and worked a second part-time job to stay on my feet. I was like a clown juggling twenty balls in the air, hopping on one foot.”

The last straw for Logan was when his next-door neighbor, Pete, who Logan considers lazy, was approved for a loan modification.

”Lazy? Try irresponsible. The guy used his house like an ATM machine. He put in a pool, added a game room, bought cars, you name it. Then as soon as he loses maybe an hour a week of work he defaults on his home loan. What happens? He gets a loan modification, cuts his payments in half. He’s still there.”

Pete’s largesse hit home for Logan one particular night when Logan stood outside and observed their two houses. Pete’s house “was lit up like a pinball machine. Giant flat screen TVs glowed and flashed in every window upstairs and down. My house looked like the Little House on the Prairie-maybe a wisp of smoke rising from the chimney; maybe a mule in the yard.”

Logan was denied a loan modification. “I was treading water and going down. But as long as I wasn’t completely under, had one nostril above the surface, I didn’t qualify.”

Next, he tried a short sale. “My bank told me as long as I was still making payments, no short sale. So I defaulted and ruined my credit. The bank denied my short sale anyway.”

Logan decided he would never give the bank another dime.

“I don’t know why it took two years for the bank to foreclose,” he said, “but if that makes me a strategic defaulter, I’m proud of it.”

I grabbed the opportunity to hitch a ride with a Realtor and watch her in action. She was on her way to meet a buyer at a house just listed on the market. I climbed in the back. She piled her gear in the front passenger seat: a laptop, cell phone, Ipad, camera, a big purse and a small purse, a tangle of wires, stacks of paper. We sped away from her office.

“Don’t mind me,” I said.

She didn’t. The cell phone was ringing and the Ipad was dinging. The GPS computer-voice person squawked from the dashboard, “Proceed point-three miles and turn right.” The Realtor snapped a wireless earphone gizmo to the side of her head.

“Hi Jim,” she said. “Jim, could you hold on a sec?” She clicked her earphone gizmo. “Hi Linda, can I call you right back?” Click. “Jim? Hi. I’m on my way now.“ Click. “Hi Linda, let’s meet Jim at the property……..” She told Linda the property was $249,000, and, “……square feet? Hmmm. Let me check….” She leaned over and opened her laptop. She was oblivious to the sounds of honking and screeching outside.

I attempted control of the car from the back seat. I shifted my weight back and forth, gripped the head rest in front of me, and made noises like, “Ooh, Unnh, and Yeeow!” My technique proved successful- we made it.

The house looked like a party scene, the street lined with cars. People strolled the yard. They filed in and out the front door. Jim found us. Here came Linda.

“How long has this been on the market?” asked Jim.

“A few hours,” said the Realtor. “I have the offer ready. Quick, let’s go see the house.”

Later, I got the report. Seven offers. The house sold to a cash buyer (not Jim and Linda) – $10,000 over asking price.

“Welcome to the new market,” said the Realtor.