Since property values in Riverside County havedropped 50-60% that leaves the majority of homeowners more than $50,000underwater. But wait! The state will be asking lenders to 'MATCH" theamount the state spends on principal reduction - dollar for dollar!
Thebiggest obstacle I see with this is the success of this program willdepend on the cooperation of the lending industry.
Let's look atthe rest of the bail-out plan. 1.5 billion will be given in all to fivestates; California, Arizonia, Michigan, Nevada, and Florida. Each statewill use their portion of this money differently.
As forCalifornia, it will use its money for principal reduction, mortgagereinstatement, unemployment mortgage assistance, and when all else failsTransition Assistance which is actually a HAFA Short Sale with aone-time payment of up to $5,000 to relocate.
The plan is to takeeffect before November 1, 2010. Hummm, that will give the banks plentyof time to come up with a plan of their own.
