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Lawmakers urge banks to allow aid for jobless

Five Northern California members of Congress are pressuring mortgage servicers to work with a new federally funded program in California intended to help unemployed homeowners pay their mortgages and avoid foreclosure.

The Keep Your Home California Unemployment Mortgage Assistance Program provides qualified unemployed homeowners up to $3,000 a month for up to six months to help pay their mortgage. But according to the office of Rep. George Miller, D-Martinez, if the monthly mortgage exceeds $3,000, the servicers won’t accept any payment at all, even if the homeowner could send a second check to cover the difference between what is owed and what the program covers. As a result, unemployed homeowners who could avoid foreclosure proceedings thanks to this program are instead at risk of failing to pay their mortgage and landing in foreclosure.

“If this program is to have meaningful success, mortgage servicers are going to have to get on board with processing these payments,” Miller said in a news release. “Refusing to accept dual payments is unacceptable and is a disservice to the homeowners who are doing everything they can to stay in their homes while they look for work. Homeowners shouldn’t have to forfeit their homes because of bureaucratic intransigence by banks and servicers.”

Rep. Zoe Lofgren, D-San Jose, another of the letter’s signers, said “it’s time that banks and servicers become part of the solution and not the problem.

“It’s ridiculous that servicers and banks are unwilling to participate in a program that will help protect the value of the very asset on which their loan is based on,” she said. “I find it deeply troubling that servicers would have borrowers default rather than simply accepting payment.”

In their letter – also signed by Rep. John Garamendi, D-Walnut Grove; Rep. Jackie Speier, D-Hillsborough; and Rep. Sam Farr, D-Santa Cruz – they wrote that, “we believe refusing to accept supplementary payments from homeowners is inexcusable and we strongly urge you to remedy this problem expeditiously… It is unacceptable that servicers in California are unwilling or unable to figure out a workable resolution to this problem, particularly given that two viable options to address the issue exist.”

Those options, they say, are either to accept two checks (one from the program and one from the homeowner) or to forebear the amount of the mortgage that exceeds the $3,000 program payment.

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California gets foreclosure-prevention funding

State Housing Finance Agencies (HFAs) in California and four other states can start using $1.5 billion in “Hardest Hit Fund” foreclosure-prevention funding under plans approved by the Obama Administration, the Treasury Department announced this morning.

President Obama established the fund in February to provide targeted aid to families in the states hit hardest by the housing downturn. The states approved to receive aid today as part of the first round of funding each experienced a 20 percent or greater decline in average housing prices.

Each state HFA gathered public input and created Hardest Hit Fund programs designed to meet their own states’ unique challenges. The plans were submitted to the Treasury Department in April, and the approved states can now set up and roll out their programs.

California’s share is $699.6 million, with which the state will implement its plan:

    Unemployment Mortgage Assistance (UMA) – Intended to help homeowners who have lost their jobs. CalHFA will provide a temporary mortgage payment subsidy of varying size and term to unemployed homeowners who wish to remain in their homes but are in imminent danger of foreclosure due to short-term financial problems. These funds could provide up to six months of benefits with a monthly benefit of up to $1,500 or 50% of the existing total monthly mortgage, whichever is less.
    Mortgage Reinstatement Assistance Program (MRAP) – Intended to help homeowners who have fallen behind on their mortgage payments. CalHFA will provide limited money to reinstate mortgage loans that are in arrears in order to prevent potential foreclosures – up to $15,000 per household or 50 percent of the past due amount, whichever is less, with a required dollar-for-dollar contribution match from the lender, servicer, insurer and/or borrower.
    Principal Reduction Program (PRP) – Intended to help homeowners who have severe negative equity – or are “underwater,” in the common slang. CalHFA will put up money, matched by participating financial institutions, to reduce outstanding principal balances of qualifying underwater borrowers. Principal balances will be reduced to market levels needed to prevent avoidable foreclosures and promote sustainable homeownership. The principal reduction program should most likely be a prelude to loan modification.
    Transition Assistance Program (TAP) – Intended to help stabilize communiteis by giving homeowners help in relocating when it’s determined that they can no longer afford their home. CalHFA’s transition assistance will be used along with servicer/investor short sale and deed-in-lieu of foreclosure programs to help borrowers transition into stable and affordable housing elsewhere. Borrowers will be responsible to occupy and maintain the property until the home is sold or returned to the lender as negotiated. Funds will be available on a one-time only basis.

House Education and Labor Committee Chairman George Miller, D-Martinez, issued a news release praising the funding.

“Every family in our community has felt the effects of this severe economic recession and the problems in California’s housing market,” he said. “People have lost their jobs and their homes through no fault of their own. This new federal program is intended to help homeowners in our state and to help stabilize our economy.

“Of course there is more to do, and we’re continuing our work in Congress to save and create good American jobs to turn the economy around and get people back on their feet. In the end, the best way to help avoid foreclosure is to get more Americans back to work. We’re making progress in that direction but that remains our top priority.”

The other states cleared for funding today were Arizona, Nevada, Michigan and Florida.

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Recovery Act $$$ for Alameda County, Oakland

In short: $11 million to Alameda County for housing rehab and job creation, and $6.8 million to support Early Head Start in Oakland.

The U.S. Department of Housing and Urban Development released $2 billion from its Neighborhood Stabilization Program today, including the $11 million for Alameda County, bankrolled by the American Recovery and Reinvestment Act.

The NSP aims to spur economic development in hard-hit communities and create jobs by providing resources to buy and rehabilitate vacant homes and convert them to affordable housing. More specifically, the money is supposed to be used to help state and local governments and non-profit developers collaborate to buy land and property; demolish or rehabilitate abandoned homes and buildings; and/or to offer down-payment and closing cost assistance to low- to middle-income homebuyers. Grantees can also create “land banks” to assemble, temporarily manage, and dispose of foreclosed homes.

The awards also require housing counseling for families receiving homebuyer assistance funds through the NSP, and grantees must ensure that new homebuyers under this program get mortgages from lenders who agree to comply with sound lending practices.

California received about $318 million under today’s grant release; Gov. Arnold Schwarzenegger said it’ll “help provide prompt relief and assistance to individuals, families and communities while also helping create jobs throughout California.”

More about the NSP, and about the Early Head Start money for Oakland, after the jump…
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Stimulus $$$ for weatherization, green jobs

The U.S. Department of Energy today announced it’s providing more than $74 million under the American Recovery and Reinvestment Act economic stimulus plan to expand home weatherization aid programs in California.

This is only 40 percent of California’s eventual share: The state received 10 percent in March for training and ramp-up activities, and it’ll get the other half after demonstrating successful implementation of its plan to weatherize more than 50,000 homes, thus lowering energy costs for low-income families, reducing greenhouse gas emissions and creating green jobs. In the end, California’s funding is expected to exceed $185 million, of which up to 20 percent can be spent to hire and train workers.

The Weatherization Assistance Program will be available to families making up to 200 percent of the federal poverty level, about $44,000 a year for a family of four; these families will see an estimated average of 32 percent for heating bills and savings of hundreds of dollars per year on overall energy bills, according to the Energy Department. States will spend about $6,500 to weatherize each home.

In California, more than 50 non-profits, local governments and community groups will do the work, using national auditing tools to examine homes and determine what’s needed; the state will also require that a third party inspect all weatherized properties, measuring performance based on the work’s quality and speed. And the state will follow the recommendations of the California Green Collar Jobs Council by employing members of the California Conservation Corps, YouthBuild, and other youth employment groups; outreach for the program will be done by canvassing neighborhoods, local advertising, and cooperating with landlords and property managers.

California was among 15 states with funding announced today; more than $453 million is being delivered across the nation.

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Local agencies get ‘YouthBuild’ federal funds

Three local agencies have landed grants from the U.S. Department of Labor’s YouthBuild program, which helps out-of-school youth get their diplomas or GEDs while providing occupational training in the construction industry to build and renovate affordable housing within their communities.

The Youth Employment Partnership in Oakland gets $675,000; the City of Richmond Employment and Training Department gets $687,500; and the San Joaquin County Office of Education in Stockton gets $687,500. All of them seem to have received funding through this program at some point in the past.

Overall, Labor Secretary Hilda Solis announced about $114 million granted to 183 community groups this past weekend; that’s an initial increment for two years of grant operations, and more might be awarded if money becomes available. Of the 183, 62 were current YouthBuild grantees and 121 were new. The awards include about $47 million from the American Recovery and Reinvestment Act economic-stimulus funding, although the Oakland, Richmond and Stockton projects received regular funding.

YouthBuild participants include those who have been in the juvenile justice system, youth aging out of foster care, high school dropouts and others. Besides getting academic and occupational skills training, they develop leadership skills and take part in community service opportunities. Many learn green building techniques by helping to retrofit existing homes, learning to make their communities sustainable and environmentally friendly. YouthBuild was transferred by Congress from the U.S. Department of Housing and Urban Development to the Labor Department in 2006, and it’s being revamped to include what the Labor Department describes as “a rigorous randomized control trial evaluation of the YouthBuild program to learn more about its impact on the disadvantaged youth it serves.”

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Tauscher, other local Dems praise foreclosure bill

New Democrat Coalition chairwoman Ellen Tauscher, D-Alamo, has been getting no love from the liberal netroots – see here, here and here for examples – over her role in H.R. 1106, the foreclosure-prevention legislation. That didn’t stop her from expressing joy as the bill passed the House today on a 234-191 vote.

“I am pleased that the House approved the Helping Families Save Their Homes Act. This is one component of a very large effort to stabilize the housing market and limit the number of home foreclosures in California and across the country,” she said in a statement issued this afternoon. “Accessible and sustainable loan modifications are essential to getting millions of families the tools they need to stay in their homes.”

Her news release said she “played a leading role in improving the bill, which is a key part of President Obama’s Making Home Affordable program, so that homeowners can first and foremost access a loan modification plan and, allowing homeowners in the most dire of circumstances, to seek relief through bankruptcy as a last resort.” She also “inserted language into the bill to prevent homeowners who can afford their loans from abusing the system by filing for bankruptcy just to capitalize on falling real estate prices,” the release said.

Other, more liberal Bay Area House members gave the bill similarly rosy reviews. Read ‘em, plus the GOP’s take, after the jump…
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