California to Dole Out $2B in Homeowner Help

...If banks will get on board
By Kevin Spak,  Newser Staff
Posted Feb 10, 2011 2:13 PM CST
California to Dole Out $2B in Homeowner Help
A foreclosed home is seen for sale in Hawthorne, Calif., July 21, 2010.   (AP Photo/Reed Saxon)

California has launched a $2 billion program designed to help struggling homeowners keep their houses. The program will be paid for by federal funds originally intended to help rescue the financial system in 2008, the LA Times reports, and could prevent some 95,000 foreclosures—if the state can get lenders on board. So far only one of the five major mortgage carriers in the state has signed on.

California's housing agency "went out of its way to meet the needs of the financial industry in terms of providing a generous incentive,” says the director of the Center for Responsible Lending, “and even after taking their extensive input into the design, the banks are still not stepping up to participate.” Another observer called lender involvement “pretty dismal.” (Read more mortgage stories.)

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