05/10/2012 11:54 am ET Updated Jul 10, 2012

Keep Your Home, California!

According to the U.S. Treasury Department, California has been one of the hardest hit among state foreclosure rates. That standing made the state eligible for foreclosure prevention funds from the Treasury Department. The $2 billion received funded California's mortgage payment assistance program, Keep Your Home California (KYHC). In a press release dated May 7, 2012, the California Housing Finance Agency announced changes to KYHC which will enable more homeowners to qualify for the program. These changes are being implemented with the hope that more servicers will participate in the principal reduction program, one of the four programs offered by Keep Your Home California.

With only 14 servicers participating in the Principal Reduction Program, Keep Your Home California removed the requirement that mortgage servicers match the federal funding for reductions in mortgage principals. This modification to the program removes reluctance servicers might have relating to expense concerns.

The specific changes to the program include:

• An increase in principal reductions: Effective in June 2012, KYHC will now solely fund up to $100,000 in principal reductions per household. Servicers do not have to match those funds if they provide rate or term modifications that give homeowners a monthly mortgage payment they can manage and sustain. Funds will be made available in the first year, rather than spread out over three years, and the amount of forgiven principal will extend to five years from the program's previous three year timeframe.

• An increase in benefits: Previously, Keep Your Home California capped its program benefits at $50,000, which has now been increased to $100,000. This increase will also go into effect in June.

• An increase in mortgage assistance funding: The Mortgage Reinstatement Assistance Program provides funds to help homeowners who are suffering a financial hardship become current on their mortgage. Previously set at $20,000 per household, KYHC will now provide $25,000 per household, effective May 7, 2012.

These changes are in addition to Keep Your Home California's Unemployment Mortgage Assistance, which provides up to $3,000 a month in mortgage assistance to those receiving unemployment benefits, and a Transition Assistance Program, which provides relocation dollars up to $5,000 to assist homeowners who must relocate due to a short sale or deed-in-lieu of foreclosure.

Since its inception in February 2011, 19,000 homeowners have received assistance through Keep Your Home California. According to the Executive Director of the California Housing Finance Agency, Claudia Cappio, these recent changes to the program "will allow more families to qualify for the programs and remain in their homes." These changes should also increase the number of servicers who are participating in the Principal Reduction Program by eliminating previous obstacles and making funds available much faster. A current list of mortgage servicers who are participating in each program can be found here. Homeowners with participating servicers must meet eligibility requirements, which are also available here.

To learn more, visit or its Spanish site at A toll-free number (888-954-5337) is available for homeowners, as well, and is open Monday through Friday from 7 a.m. to p.m. and on Saturdays from 9 a.m. to 3 p.m.

Struggling homeowners should contact Keep Your Home California to learn if they are eligible for any of these programs, which should enable more homeowners to prevent foreclosure through mortgage assistance, mortgage principal reductions, and unemployment assistance.

Anna Cuevas, known as "America's Loan Modification Guru," has guided thousands of Americans in keeping their homes from foreclosure. A popular blogger ( and, Cuevas has been called a "superhero of the loan modification industry" and has been nominated for CNN's Heroes. She is the #1 bestselling author of SAVE YOUR HOME Without Losing Your Mind or Money.