Another bail-out plan approved June 23, 2010 by the Obama
Administration, the "Keep Your Home" program. California will receive
$699.6 million to "work with lenders" to make principal reductions.
Under the new program, there will be a $50,000 cap on principal
Since property values in Riverside County have
dropped 50-60% that leaves the majority of homeowners more than $50,000
underwater. But wait! The state will be asking lenders to 'MATCH" the
amount the state spends on principal reduction - dollar for dollar!
biggest obstacle I see with this is the success of this program will
depend on the cooperation of the lending industry.
Let's look at
the rest of the bail-out plan. 1.5 billion will be given in all to five
states; California, Arizonia, Michigan, Nevada, and Florida. Each state
will use their portion of this money differently.
California, it will use its money for principal reduction, mortgage
reinstatement, unemployment mortgage assistance, and when all else fails
Transition Assistance which is actually a HAFA Short Sale with a
one-time payment of up to $5,000 to relocate.
The plan is to take
effect before November 1, 2010. Hummm, that will give the banks plenty
of time to come up with a plan of their own.