$1 million Foreclosure Prevention Program launched by Menlo Park City Council
The City Council of Menlo Park has voted to allocate $1 million to fund an innovative program to assist qualified homeowners with refinancing their property – “in an effort to stem the rising tide of home foreclosures and enhance neighborhood stability,”
According to a press release issued by the City, “the Foreclosure Prevention Program is a unique public-private partnership developed by the non-profit Northern California Urban Development (NCUD) and The EARN Group. Through the program qualified homeowners in the process of losing their home may be able to reduce their mortgage by up to $100,000. The funding takes the form of an equity investment provided by the City of Menlo Park.”
“The Foreclosure Prevention Program provides the city with the means to both help residents in need and to invest in our future,” said Doug Frederick, Housing Manager for the City of Menlo Park. “This program is designed to specifically help stabilize housing in and around the Belle Haven neighborhood of Menlo Park.”
Through the Foreclosure Prevention Program, NCUD and EARN are working with city administrators and residents to reduce mortgage defaults by refinancing existing loans and replacing a portion of the current mortgage debt with an equity investment. If the homeowner can qualify for a lower mortgage payment on approximately 70 percent of the current fair market value of the home, the balance of the financing will come from Foreclosure Prevention Program funds that will replace the remaining debt with an “EARN Equity Certificate.” This certificate has no current payment requirement for the homeowner. Instead, the homeowner will share a portion of the home’s future appreciated value with the city.
The complete press release is available here!