California officials say they hope a handful of new programs can help save 100,000 homes from foreclosure. The programs are part of an effort called, “Keep Your Home California,” which is backed by nearly two billion dollars in federal funds.
One plan would provide money to reduce the principal owed on a home mortgage. Paul Leonard with the Center for Responsible Lending says these programs can be effective, but only if homeowners know about them and big banks are on board. According to Leonard, the principle reduction program only has one major bank signed up to participate so far.
“We certainly hope that other banks will follow suit,” said Leornard.
Another element of the program would provide up to 3,000 dollars in mortgage assistance for unemployed homeowners.
The California Mortgage Bankers Association says it may be just a matter of time before the large banks expand their participation.
