California has a new COVID-19 mortgage relief program. Here's how to get help

Jon Healey, Los Angeles Times on

Published in Business News

This is a key question, given that the federal government lifted its moratorium on foreclosures of government-backed mortgages at the end of July. According to the state Attorney General’s Office, homeowners are still entitled to ask their lender for a debt-deferral deal that could keep them out of foreclosure for at least a few more months, but if your lender won’t grant you forbearance, you’ll need help in a hurry.

A spokeswoman for the program said officials are hoping to get the aid flowing quickly; the state has been running a pilot version of the program since August, so it’s not breaking new ground here, just scaling up. A key factor in how quickly your application can be processed is whether you provide all the necessary documents and attestations in a timely fashion.

Applicants who are denied can reapply if their circumstances change. They can also appeal the decision by emailing and making their case for a reversal.

Once your application has been granted, though, you won’t be eligible for any further aid from the program.


When will the program end?

There is no set date; instead, the state will continue to offer help to homeowners who became delinquent in 2020 and 2021 until it has spent all $1 billion from the federal government, a process that’s expected to take three years. The state estimates that the money will be enough to help 20,000 to 40,000 borrowers.

The money will be awarded on a first-come, first-served basis, with one important exception: Forty percent of the aid must go to “socially disadvantaged homeowners.” Those are residents of the neighborhoods most at risk of foreclosure, based on the Owner Vulnerability Index developed by UCLA’s Center for Neighborhood Knowledge.

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