As the state with the highest concentration of reverse mortgage volume in the country, California is a market that holds a lot of sway in the affairs of the reverse mortgage business. Like many other states, California was given a sizable allocation of cash under the Homeowners Assistance Fund (HAF) program through 2021’s sweeping American Rescue Plan Act legislation: roughly $1 billion out of the $10 billion distributed nationally.
But a new report from the San Francisco Chronicle details that nearly half of that total allocation — just under $500 million — remains unused, echoing the struggles of other states in getting the word out about the relief the program can provide.
As a result, the program is being expanded in the hopes of reaching more state residents, according to a representative of the California Housing Finance Agency (CalHFA). The state is resetting the delinquency date from March 1 to Aug. 1, 2023.
“We understand many homeowners are still grappling with the financial impact of the COVID-19 pandemic,” said Rebecca Franklin, president of the CalHFA Homeowner Relief Corp., in a statement to the Chronicle. “Resetting the delinquency date means more families can now qualify for our program.”
Outreach efforts have lagged, which means that the program has flown “under the radar” for many potential beneficiaries within the state, the report explained.
According to a program dashboard maintained by CalHFA, the state HAF funding has assisted more than 21,000 households with an average relief amount of $25,332 per household, for a total of $540,373,168 in relief.
The highest concentration of the relief funds have been given in Los Angeles County, which accounts for just under $142 million of the total amount disbursed statewide. Over 4,800 households within that county alone have received assistance under the program.
The mortgage industry has had issues connecting with impacted borrowers about the availability of HAF funding, which was further complicated by the fact that each state has set up its own administrative program for HAF funding. This has reportedly caused chaos for mortgage servicers.
The reverse mortgage industry has also faced problems with informing clients of the availability of HAF funds. In a late 2022 episode of The RMD Podcast, Celink SVP of Client Satisfaction Gail Balettie discussed some of the issues that have persisted for servicers with regard to informing borrowers about the HAF option.
“The challenge with the program is that it was like you were administering 50 different loss mitigation plans, because all of the states had different rules, guidelines and processes,” Balettie said in November.