|Principal Reduction Program an option for homeowners with a Loan-to-Value ratio of 120% or greater|
|Earlier this month, Keep Your Home California put out a press release to remind homeowners of the $100,000 in mortgage payment assistance available to homeowners with severe negative equity, through the Principal Reduction Program. In order to qualify for a principal reduction through Keep Your Home California, homeowners must owe more than their home is worth, meet program eligibility criteria including county by county income limits, and their mortgage servicer must participate.
More than one in every 10 California homeowners with a mortgage owes more than the value of their home, and the percentage of underwater mortgages increases to 25 percent-plus in some of the hardest-hit regions in the state, such as the Central Valley and the Sacramento-Stockton region.
A loan-to-value ratio of 120 percent or greater is considered one of the qualifying hardships that enable homeowners to apply for the Principal Reduction Program. For example, a homeowner who owes $360,000 on a home with a value of $300,000 could qualify for the Principal Reduction Program, as long as they meet other program requirements.