Alameda Offers Potential Foreclosuree’s Financing
ALAMEDA HAS TAKEN a step this week that could help some struggling homeowners on the Island keep their homes.
The City Council approved the Refinance Mortgage Recovery loans program to offer a lifeline to homeowners facing possible foreclosure due to high interest, volatile or predatory first mortgages.
According to Rachel Silver, housing development manager for the city, Alameda may be the first to offer this particular form of assistance. While other cities have programs offering counseling to homeowners in crisis, Alameda’s plan goes a significant step farther by also offering financing.
The Refinance Mortgage Recovery program is an expansion of the city’s Down Payment Assistance program that helps first time buyers obtain mortgages. Under the new plan, qualified homeowners faced with possible loss of their houses because they can’t make the payments can work with the city to refinance with a 30-year fixed rate first mortgage.
The city would provide the gap financing for borrowers who qualify for 30-year mortgage rates but who likely would have a gap to refinance the existing loan. The city’s money would help cover that gap.
The city already has been working with an outside agency, First Home, Inc., on the Down Payment Assistance program, and that agency has contacts in the lending community that could be willing to participate in the new plan.
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