Community Housing Works

A significant number of California borrowers have been impacted by the effects of severe home value reductions and reduced wages and unemployment. Many used nonprofit amortizing second mortgages to purchase their homes.

The Community 2nd Mortgage Principal Reduction Program (C2MPRP) will reduce the number of avoidable foreclosures in California by providing a niche principal reduction program for troubled borrowers with amortizing, subordinate mortgage debt from Nonprofit Community Lenders, such as Credit Unions, NeighborWorks Organizations and Community Development Financial Institutions (CDFI).  This program is provided under a contract with CalHFA and it’s Keep Your Home CA programs, and as provided for by the US Treasury’s Hardest Hit Fund.  Imagine the many borrowers with hardships who might be able to get a loan modification from their first lender, but still have performing second mortgage debt to pay to a nonprofit lender and are deeply underwater.  Too often, the existing modification incentives, such as the HAMP Second Lien Modification Program, or 2MP, don’t fit; and CalHFA’s new Principal Reduction Program can’t assist with second liens.  This program will provide capital on a matching basis with participating nonprofit community lenders, to reduce outstanding principal balances on subordinate debt for qualifying borrowers with negative equity to those market levels needed to prevent avoidable foreclosures and promote sustainable home ownership. 

The Community 2nd Mortgage PRP can also be used in conjunction with a loan modification that generates a positive outcome for the homeowners and lenders.  CHW Lending provides statewide underwriting, processing and fund-management services through a CalHFA contract.  As a 30-year-strong, experienced underwriter and manager for government homeownership funds, CHW has over 100 years of underwriting experience on staff.  For more information, contact Dee Sodano.  As an NFMC (National Foreclosure Mitigation Counseling) counseling grantee, CHW Classes & Coaching also has the experience of over 4,000 loss mitigation files submitted to servicers on behalf of borrowers, and has documented a 95% post-modification positive borrower performance record.  Simply put, that experience has shown us that this program is exactly what is needed, and missing from, the otherwise excellent approaches of Making Home Affordable and CalHFA’s Keep Your Home CA programs.