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California Extends Relief for Delinquent Homeowners

California Extends Relief for Delinquent Homeowners

The California Mortgage Relief program, established under the American Rescue Plan Act of 2021, received $1 billion to assist homeowners grappling with mortgage payment challenges during the pandemic. Offering grants of up to $80,000, the initiative targets low- and moderate-income homeowners burdened by mortgage debts, overdue property taxes, and deferred payments, providing financial relief without the obligation of repayment. Despite the availability of aid, awareness among homeowners has been limited, prompting multiple extensions of the program and outreach efforts to expand its reach, particularly to borrowers facing post-COVID financial strains.

In the latest extension, eligible homeowners who missed at least two mortgage payments or one property tax payment by Feb. 1 can access assistance, subject to certain restrictions such as property occupancy and income thresholds. State officials have committed to sustaining the program until the entire $1 billion allocation is disbursed, with approximately a quarter of the funds remaining and nearly 30,700 households statewide benefiting from an average debt reduction of $25,000.

James An, president of the Korean American Federation of Los Angeles, highlighted ongoing challenges faced by homeowners, especially the elderly, as a result of the pandemic’s enduring repercussions. Factors such as business closures, illness, and marital strain have contributed to financial distress, with many individuals lacking the necessary technological proficiency to engage with the program independently. Community organizations like the Korean American Federation continue to provide assistance to applicants, emphasizing the importance of accessible support services.

Eligibility for relief is contingent upon federal income criteria and pandemic-related financial hardships, encompassing reduced income or increased living expenses. Applicants must meet specific requirements regarding property ownership, mortgage servicer participation, and income thresholds. Furthermore, the program extends beyond mortgage and property tax relief, encompassing various financial obligations such as reverse mortgages and partial claim second mortgages. The application process is accessible online or through certified housing counselors, with comprehensive documentation required to ascertain eligibility and facilitate assistance disbursement.

Statistics from the program indicate a significant portion of aid has been allocated to households below the area median income, with targeted support for socially disadvantaged homeowners vulnerable to foreclosure risks. While aid distribution operates on a first-come, first-served basis, allocation mandates prioritize households with limited financial resources, underscoring the program’s commitment to equitable relief distribution.

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