Pay mortgage with 401(k) funds?

By Christopher Quinn
he Atlanta Journal-Constitution
A proposal by two Georgia congressmen to let homeowners take money from retirement accounts to pay down mortgages could help some avoid foreclosures but is drawing fire for encouraging risky financial behavior.
The HOME Act would let homeowners withdraw up to $50,000 from a 401(k) without paying the normal 10 percent penalty for early withdrawals.
The sponsors, Sen. Johnny Isakson and Rep. Tom Graves, say people threatened with the loss of homes should not have to pay a penalty for withdrawing their own money to reinvest in their houses.
“If you look over time, and people are saving for the long term, a home is the most important asset a family has,” Isakson said.
But many experts question whether home values have yet bottomed out or will resume rising any time soon. And taking money from a 401(k), which is protected from creditors, and investing it in a house that may lose more value or be taken by a lender if the owner defaults could be throwing good money after bad, financial advisers say.
“If you lose your house, you just contributed your $50,000 to someone else’s pocket,” said Casey Smith, of Wiser Wealth Management in Marietta.
Those getting an immediate gain from the infusion would be banks or lenders, he said.
Joe Brannon, the president of the Georgia Bankers Association, said his group did not ask for the bill. He added it might help some homeowners but that they should make such withdrawals only after conferring with experts.
The HOME Act’s prospects are unclear. The bill has been assigned to committees in both the Senate and House.
Isakson, a longtime real estate executive before his election to the Senate, agreed that such a withdrawal would not be wise in every case. He said good candidates could be those who owe more on a home loan than their house is worth — known as being underwater — because of recent precipitous fall in property values. That owner could pay down the debt and get back above water, which would allow them to refinance at a lower interest rate, saving them hundreds of dollars a month.
Or a homeowner with a relatively small mortgage could pay it off and have more money to live on, he said.
In metro Atlanta, 82,285 owners have received default notices so far this year. And 423,130 homeowners in metro Atlanta are underwater on their loans, according to the California analytics firm CoreLogic.
Graves said the HOME Act would protect retirement accounts by limiting withdrawals to $50,000 or half of what is in the 401(k) account, whichever is smaller. And those tapping an account must meet hardship guidelines that already allow account holders to withdraw money without penalty to pay for college tuition or medical emergencies.
Not every 401(k) plan allows hardship withdrawals, but those that do have requirements such as an owner has an immediate financial need and no other funds available, and the owner must have first have tried to get a nontaxable loan from the account.
Withdrawals for the purchase of a principal home can be considered as a hardship need.
Graves said the idea came from a mortgage industry worker who serves on his economic advisory council of Northwest Georgia businessmen.
Tapping retirement money could be a final lifeline for families trying to hold onto a home, Graves said.
“In most cases we’ve heard of, that would generally be a last resort, and when someone reaches that point in order to preserve their home, they should not be penalized by the government,” he said.
Nancy Montgomery of College Park has been fighting to keep her home from going into foreclosure for two years through a morass of paperwork and changes in lenders as mortgage companies collapsed.
When she got a letter saying her home would be sold on the courthouse steps in October, she took the only course she could see to save her home. She tapped $6,000 from her 401(k) to pay off the debts.
“It came too late for me,” she said of the Isakson-Graves proposal.
“I got it out, but I had to pay the penalty,” Montgomery said.
People in such financial distress are the ones most likely to default later on a mortgage, Smith said. Many of them are in danger of losing their homes because of the bad economy or poor personal financial management.
“If you have a hard time controlling money, then you are dealing with the inevitable of either walking away from a home or bankruptcy. At least keeping money in a 401(k) gives you some protection,” Smith said.
Chris Tierney of Hays Financial Consulting in Atlanta applauded the legislators for trying to remove government sanctions for people accessing their money, but he questions using the money for mortgage payments.
Tierney said it would be better for those in foreclosure to try and cut a deal with the bank than spend retirement money, he said. He said the $50,000 limit is not enough to make a real dent in the middle-incoming housing market problem anyway.
Also, those whose houses are worth less also are the most likely to not have substantial or any retirement income, he said.
“Those are the people when they turn 65 are going to have nothing, so they are going to have to work until they are 70 or 75 and are going to be on every social program.”

Obama administration ramps up mortgage refinancing effort

By Don Lee, Los Angeles Times
The White House hopes by the end of the month to announce changes that will make it easier for more homeowners — perhaps millions more — to participate.

 Reporting from Washington—
The Obama administration, worried that the housing crisis is strangling the economic recovery, is stepping up efforts to aid the battered market as another wave of home foreclosures threatens to drive values down further and rattle consumer confidence again.
But the administration's piecemeal approach — giving temporary reprieves to the jobless, converting empty homes into rental properties, allowing more people to refinance mortgages — isn't going to help much, said industry leaders and even some lawmakers in the president's own party.
What's needed, they said, is a grand plan, such as an across-the-board reduction of the principal homeowners are carrying on their mortgages.
"Abysmally too little is being done to deal with the problem," said Rep. Dennis Cardoza (D-Atwater), who recently led a contingent of California lawmakers in denouncing the administration's handling of the crisis.
He said 70% of the homeowners in his district are underwater on their mortgages, meaning they owe more than their homes are worth. And a map of San Joaquin County in his office shows clusters of red where constituents have lost their homes to foreclosures.
To counter such criticism, the White House hopes to announce changes to its main refinancing program within days to make it easier for more homeowners — perhaps millions more — to participate. Agency officials are looking at reducing fees, streamlining processes and raising the the loan-to-home value ratio cap, which is now at 125%, to be eligible for refinancing.
The administration hopes that the "amped up" effort, as one aide to President Obama put it, will help turn the tide. But aides and congressional staff members acknowledged that the economic and political problems afflicting housing recovery efforts remain daunting.
The government doesn't have the money to rescue every troubled homeowner, lenders are reluctant to take on more risk or add to their mortgage losses and sharp ideological divisions — whether a major stimulus is needed, for instance, or any money should be spent — are hamstringing the kind of quick, large-scale action that some critics want.
Even today's historically low interest rates aren't helping.
Underwater borrowers can't qualify for new loans or refinancings even if they are current on payments. And many would-be buyers are sitting on their hands, spooked by the high numbers of foreclosures and vast tracts of vacant homes.
In the meantime, banks are stepping up efforts to foreclose on borrowers in default. In the three months that ended Sept. 30, notices of default, the first formal step in the foreclosure process, jumped nearly 26% from the previous quarter, according to DataQuick, a San Diego real estate information service.
Additionally, a likely national settlement over complaints about banks filing faulty paperwork to take back homes should clear the way for an additional 400,000 foreclosures in coming months, according to Moody's Analytics, an economics research firm.
Moody's predicts that foreclosures will rise next year to a record 1.5 million, or a hefty 30% of all sales of previously owned homes.
The new crush of distressed properties will further dampen home values, especially in hard-hit Florida, California and Nevada, inflicting more damage on the broader economy and job growth.
Amid rising concerns, White House officials are intent on easing the rules of the Home Affordable Refinance Program, which allows mortgages backed by financing giants Fannie Mae and Freddie Mac to be refinanced at lower rates.
HARP, begun in 2009, was supposed to help millions of homeowners, but instead just 865,000 loans have been refinanced through July.
Economists and housing industry executives said the program's stringent requirements made many homeowners ineligible. For example, borrowers can't qualify if their mortgages exceed 125% of their homes' value. Those who do qualify might face stiff fees.
Banks, meanwhile, have been reluctant to participate, partly because they feared they might be required to buy back mortgages if even small violations of government underwriting guidelines occurred.
Obama can't make changes in HARP. That's the realm of the Federal Housing Finance Agency, an independent agency that took control of Fannie and Freddie in 2008.

Alarm at private police operating beyond the law

By Nina Lakhani

MPs to investigate legal loophole in private police contracts

Hundreds of privately contracted police officers are working for forces across the country despite being unaccountable to the watchdog responsible for investigating deaths in custody, public complaints and allegations of wrongdoing, an investigation by The Independent has found.

The Independent Police Complaints Commission (IPCC) has no automatic power to discipline privately contracted staff even if individual failures or misconduct contribute to the death or serious injury of a detainee.

The Government has failed to close this regulatory loophole despite warnings dating back several years. The IPCC has investigated a number of cases in which privately contracted staff were found to be working alongside police officers when a detainee suffered serious harm or death. Chief constables can currently choose to designate private custody and transport officers as working within the watchdog's jurisdiction, but this does not happen consistently, according to the IPCC.

MPs last night condemned the Government for failing to extend the IPCC's statutory powers despite the increased outsourcing of traditional police roles to private firms including Reliance Security and G4S. The use of privately contracted officers is rapidly expanding into areas such as call handling and ID parades as police forces grapple with budget cuts. South Wales, Lancashire and Cleveland are among those already outsourcing frontline police jobs.

The Independent has established that G4S has more than 300 staff working in 30 custody suites in three police forces, while Reliance Security employs 690 staff across 13 forces. A number of forces also buy in temporary extra manpower to assist in dealing with serious crimes such as murder investigations, manhunts and major protests through G4S Policing Solutions' database – which has 17,000 former police officers and support staff on its books.

Keith Vaz MP, chairman of the Home Affairs Select Committee, confirmed last night that the loophole would be investigated in the committee's forthcoming inquiry into the IPCC. "With 16,000 police officers due to be axed over the next four years, the use of private contractors to undertake the work of detectives, control-room call handlers and custody officers is set to increase," he said. "I will be writing to the Home Secretary to ask why no action has been taken to close this gap in jurisdiction... We must ensure those who undertake these crucial positions are accountable to the public they serve."

The issues were first highlighted in the case of Gary Reynolds, 43, who was found in a coma in his cell more than seven hours after being restrained and arrested in Brighton in March 2008.

In May 2009, the IPCC found that the "combined actions and inactions of custody sergeants and privately contracted staff in the custody centre contributed to a systematic failure to adequately look after the man whilst he was in their care".

Three police officers were given "words of advice", but the custody sergeant was allowed to retire and so escaped any disciplinary proceedings. He now issues firearms licences in a civilian post with Sussex Police. The IPCC could not enforce disciplinary measures on the Reliance custody staff.

The IPCC proposed "legislative changes" in February 2011 to "extend IPCC jurisdiction to include contracted staff". A Home Office spokesman said last night it was "considering what types of contracted-out staff the police complaints system should apply to".

Tom Brake, co-chairman of the Liberal Democrat backbench Home Affairs, Justice and Equalities Committee, said the increase in publicly funded private contracts should not be an "excuse for a lack of accountability". "As government contracts move to the private sector we need to ensure that private companies are subject to the same scrutiny as the public sector ,which includes being subject to the IPCC and Freedom of Information," he said.

Following Mr Reynolds's case, the IPCC also recommended changes to the Home Office police code which would require custody staff to carry out regular checks on anyone suspected of drinking even a small amount of alcohol. Instead, a significantly revised version of the safer detention guidance will be made available to forces next month and formally published next spring – three years after the IPCC report.

The National Policing Improvement Agency, which undertook the review of detention guidance, said: "We have [also] recently completely reviewed and revised the police custody officer training and first-aid training. We have not made the training available to the private sector as there has been no request for this to date. We would make it available to them if they approached us."

Both Reliance and G4S said their training arrangements were approved by individual police forces. G4S said it would welcome the introduction of tighter regulation, a voluntary code of conduct and minimum standards: "We fully co-operate with IPCC investigations and work with the relevant police authorities to ensure any recommendations are applied as appropriate."

Reliance said: "Whenever there are investigations conducted by the IPCC or any other incidents occur within custody, Reliance works very closely with the relevant police force to ensure that appropriate action is taken by all staff with regards to the lessons learnt."

Case Study: Marathon runner now struggles just to get up

Gary Reynolds, 43, a painter and decorator who also ran marathons, was restrained and arrested for being drunk and disorderly in Brighton city centre in March 2008 after leaving a party at a pub. The arresting Sussex Police officers later reported hearing a "thud or crack" as if his head hit the ground, but instead of taking him to hospital, they performed only a cursory check for blood or other obvious injuries.

He was taken to a custody centre outsourced to Reliance Security, where he was left in a cell to sleep off the alcohol overnight; none of the officers mentioned his possible head injury to the custody sergeant. By the time someone finally tried to rouse him, nearly eight hours after he was placed in the cell, he had slipped into a coma having suffered a brain haemorrhage and fractured skull. The untreated head injury left him paralysed on his left side, cognitively impaired and in need of constant care.

In 2009, the IPCC found "a collective lack of appreciation of the content and importance of following Sussex Police Policy and Safer Detention Guidance, in particular among Reliance staff and custody officers".

His brother Graeme said their whole family had been "tortured" by the events of that night. "All the agencies involved had the opportunity to make changes. But they haven't; they have put money first again. It would make us all feel better without a shadow of a doubt if we knew lessons had been learnt and that this could never happen again," he told The Independent.

Gary is still struggling to come to terms with his injuries and finds getting up each day "more difficult than running three marathons". He is currently in a rehabilitation unit.

Mayor of Japan's home of nuclear power hoping to make village a different kind of 'first'

Amid the ongoing disaster at the Fukushima No. 1 Nuclear Power Plant, the mayor of the Ibaraki Prefecture village of Tokai, the birthplace of Japanese nuclear power, is calling for the village's nuclear reactors to be decommissioned.
A village that extends seven to eight kilometers both north-south and east-west, Tokai holds 12 nuclear power-related facilities within its borders. Among the roads running east and west through the village are Genden-dori, named after the Japan Atomic Power Company; Genken-dori named after the Japan Atomic Energy Agency; and Donen-dori named after the former Power Reactor and Nuclear Fuel Development Corp., known as PNC or Donen. One-third of the village's 38,000 residents either hold jobs relating to nuclear power or have a family member who does. And yet, Tatsuya Murakami, Tokai's 68-year-old mayor, is adamant.
"Looking at how Fukushima has been handled, I've realized that Japan isn't capable of controlling the massive science and technology of nuclear power. I've come to feel that Japan isn't entitled to it, and have decided that we have no other choice but to abandon nuclear power," says Murakami. "The government thinks nothing of the fact that there are 54 nuclear reactors in one of the world's most earthquake-prone areas. There's so much egotism, such arrogance against nature in that."
Murakami speaks with an unaffected Ibaraki dialect, but the bluntness of his words is powerful.
Until now, the responses of municipal government leaders when faced with radiation leaks or other nuclear power-related problems have generally been the same. They first criticize the incidents, citing concerns about local residents' health, but ultimately allow nuclear-related projects to go on after pressing for "measures to prevent future incidents" and emphasizing that "safety must come first." It seems that Murakami, however, isn't going to be content with that.
The first time a test nuclear reactor in Japan reached criticality was on Aug. 27, 1957 in the village of Tokai. It was also in here that the nation's first commercial nuclear reactor began operation, and its first one-million-watt class reactor was built. According to the village charter, Tokai residents are "a people built upon a traditional history and the atomic fire."
Murakami was first elected as mayor in 1997 and is now serving his fourth term. While he called for "coexistence with nuclear power" in past elections, he has always taken a cautious stance toward the new construction of nuclear power plants, a wariness that stems from an accident called the JCO accident.
On Sept. 30, 1999, slipshod work at the nuclear fuel reprocessing company JCO led to the nation's first criticality accident. The company did not contact the Tokai's government, telling them its employees had evacuated, until about an hour after the incident took place, after it had already contacted the then Science and Technology Agency (now the Ministry of Education, Culture, Sports, Science and Technology (MEXT)) and the prefectural government.
Murakami was told that the villagers would be all right if they stayed indoors, but he didn't trust this and, as neither the agency nor the prefecture had set up an emergency task force yet, Murakami himself decided to tell village residents to evacuate. In the end, the incident left two JCO workers dead and over 600 Tokai residents exposed to radiation.
"Even though those at the scene were saying that a criticality accident had taken place, the government took an attitude like, 'That could never happen,'" Murakami recalls. "It's the same as how the government resisted admitting for as long as possible that a nuclear meltdown had taken place in Fukushima."
Murakami says the government covered up the facts and was not prepared to deal with a worst-case scenario. "From how the government handled the situation in Fukushima, I saw once again how it put nuclear power first and residents' lives and local communities second." The villagers' attitude toward nuclear power has been shifting, the mayor adds.
The JCO facility in Tokai village had no choice but to back out of the nuclear fuel reprocessing business after the incident. Today, around 40 employees continue to keep tabs on over 8,000 drums worth of low-level radioactive waste at the facility, located in the western part of the village and surrounded by farmland and private homes. JCO conducts briefing sessions regarding nuclear power for local residents every year.
"This year's briefing session was after the quake, in July. We were told that the facility was not affected by the earthquake, but who knows," said an elderly woman tending to her farm. "It's said that if a bigger quake hit and the drums fell, there's a risk of the radioactive waste escaping outside, and that's worrisome. All we want is to feel safe living on our land."
At a gallery near JR Tokai Station, an exhibit of photos taken of the village by photographer Kenji Higuchi starting the day after the JCO accident featured the concerned looks of residents who had gathered at an evacuation center and the village's deserted streets, much like the scenes from the disaster in Fukushima.
A middle-aged woman at the gallery's reception desk said: "With the Fukushima crisis, people started to realize that it was no longer just someone else's problem. It seems that more people who have family members in nuclear power-related work are now saying they're concerned about nuclear power, even if they aren't opposed to it. In retrospect, we see that the Tokai No. 2 Nuclear Power Plant could have gone the way of Fukushima."
When the quake struck on March 11, the Japan Atomic Power Co.'s Tokai No. 2 Nuclear Power Plant, which was in operation, shut down automatically. "We were told (immediately after the quake) that everything (at the plant) was fine, but that was not true at all," Mayor Murakami says. In fact, the power plant lost its external power source, and one of its three emergency diesel generators stopped working because of the tsunami. The plant was supposed to make it to a "cold shutdown" in about one day, but it ended up taking over three. The tsunami that struck the plant was 5.4 meters high. What would have happened if 15-meter high waves had hit, as they did at the Fukushima No. 1 Nuclear Power Plant?
Murakami characterizes the "nuclear village" -- the close-knit, pro-nuclear relationship between members of government, researchers and the nuclear power industry -- as resembling the state of pre-World War II Japan.
"Everything was directed towards waging war, and even if you were sure that we were going to lose, you couldn't say it. If you did, you'd be labeled as unpatriotic, right?" says Murakami. "Once you join the nuclear village, you can't question the safety of nuclear power if you want to survive there. I don't think this characteristic of the Japanese will change."
In response to criticism for his anti-nuclear stance, Murakami says: "Even if you're talking about just 38,000 villagers, you can't make an effective evacuation plan for that. What place is going to take in that many people, and provide them with food, shelter, medical treatment and education? It's a logistical issue to consider before talking about being for or against nuclear power."
The village's financial base has been dependent on nuclear power. Of approximately 20 billion yen in general revenue in fiscal 2009, around 4 billion yen came from property tax on nuclear power-related facilities, while some 1.4 billion yen came from central government handouts based on the three electric power laws and subsidies from the prefectural government. Of the village's corporate inhabitant tax revenue, about 300 million yen is nuclear power-related. All this means that nuclear power-related revenue makes up about 30 percent of the village's revenue, and criticism directed at the mayor's anti-nuclear stance generally comes down to the issue of money.
"If we're just talking about money, then yes, we gain a lot from nuclear power," Murakami says. "But what a lowly, sad people we are to think that way."
"Nuclear power plants bring in money before they're even built," he says, noting their financial lure. "We can't allow a government policy that mocks the countryside (by trying to win them over with money.) It's an evil policy, the same as colonialism.
"Our village may have reaped benefits for 30 or 40 years. But if we lose our homeland in return, what's the point? I, too, feel like I finally came to understand what "homeland" really means with the crisis in Fukushima."
The village of Tokai has been a Japanese first in many aspects of the country's nuclear power industry. Will it also become Japan's first in renouncing it?
Source mdn.mainichi.jp

Home Heating Help Gets Chilling Reception

By Ken Silverstein
LIHEAP funding may get cut in half

Providing financial assistance to the poor and elderly has historically received bipartisan endorsements. But this year there is broad political support to cut the program, all the culmination of budget battles on Capitol Hill.
Neither side needs the fallout from that. But the way things are going, the Low Income Home Energy Assistance Program, or LIHEAP, will get cut and that will impact millions of people. And those entities that contribute to the cause are in an even worse position to make up for the shortfalls. What then?
The best case scenario is to hope for a warm winter in which people need less energy as well as to have an overabundance of natural gas in storage so there won’t be any shortages. Even then, the price of natural gas for the neediest citizens will consume a much greater share of their fixed incomes: 15 percent compared to 3.4 percent for most folks, according to the National Energy Assistance Director’s Association.
“During tough economic times and with home heating and cooling prices on a steady incline, LIHEAP has never been more important for the protection of millions of struggling families,” says David McCurdy, chief executive of the American Gas Association, in an open letter to Congress.
LIHEAP provides seasonal help to roughly 8.9 million families – approximately 23 million people and the demand for increased assistance across the country continues to grow, according to the gas association. In 2008, 33.8 million households met LIHEAP’s eligibility requirements. Yet, there was only enough money in the program to serve 5.7 million households. To make matters worse, last year’s census data says that 15.1 percent of the nation – more than 46 million Americans – lives in poverty.
Now, President’s Obama’s 2012 budget would scale back LIHEAP funding from about $4.7 billion to $2.57 billion. Such a reduction would preclude 3.1 million families from receiving LIHEAP’s benefit, laments the National Energy Assistance Directors’ Association. The president’s nearly 50 percent cut in funding is countered by proposals in the U.S. Senate and U.S. House to reduce the program by 23 percent and 28 percent, respectively.
No-Win Situation
This is a no-win situation: The activists on one side are demanding cost-cutting while those on the other are saying it is high-time that the country’s wealthiest one percent pay a greater share of their income in taxes. If the coming winter proves brutal and natural gas demand spikes, images of freezing families will deluge the nightly newscast, which is hardly the intent of anyone. 
Can other sources of funds replace LIHEAP? While the difference can be defrayed by a cross-section of community groups in coordination with local utilities, that pool of money cannot make up for the entire shortfall. In addition, the energy assistance association says that states provide a minimal level of support, noting that the recession has eaten into their tax revenues and has made them even less capable of contributing more money.
Utilities, of course, are on the front lines. To the extent that they can help address the problems, they will be reducing their own bad debt and collections expenses. In fact, it's smarter economically and otherwise to provide assistance than to spend time and resources trying to collect.
Each dollar put into LIHEAP generates $5.37 of economic activity, according to a study on the economic impact of LIHEAP funding published by Entergy Corp. The demand for such help will only keep rising so as to keep pace with the increase in energy prices and the current economic downturn, the utility says. It notes that LIHEAP does not just assist those cold-weather regions but also those areas such as the Deep South that experience hot, humid conditions.
While utilities, states and citizen action groups are all chipping in to address the problem, some say that the biggest step the federal government can take is to promote energy efficiency and weatherization programs to insulate homes. Part of the money allocated to the LIHEAP goes toward such efforts that focus on reducing energy costs.
“In this time of high unemployment and economic uncertainty, LIHEAP is often the only thing that stands between a family’s choice to heat or eat,” says McCurdy with the gas association. “No member of Congress wants their constituents to be faced with that choice, so we ask them to act now and fund LIHEAP at $5.1 billion.”
EnergyBiz Insider has been been nominated in 2010 and 2011 for Best Online Column by Media Industry News, MIN. Ken Silverstein has also been named one of the Top Economics Journalists by Wall Street Economists.
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energybizinsider@energycentral.com

Keep Your Home California helps many, but critics say program slow to grow

By Rick Daysog
rdaysog@sacbee.com

A small but growing number of distressed homeowners in California are keeping their houses because of a state program funded with $2 billion in federal stimulus money.
Keep Your Home California's launch in February was marred by procedural delays and criticism from consumer groups that said the eligibility requirements were too narrow and that the program wouldn't serve enough people.
Since then, however, participation has grown quickly to about 7,000 homeowners statewide. The program has provided more than $128 million in benefits, or roughly $18,000 per homeowner.
In the four-county Sacramento area, Keep Your Home California has helped 760 distressed homeowners.
"After working out kinks in the system … we're really starting to pick up speed," said Diane Richardson, Keep Your Home California's program director.
The effort still has a long way to go. It has helped only a fraction of the thousands of California homeowners whose houses slip into foreclosure each month. And if spending doesn't pick up, it's doubtful the state can meet a federal deadline to use all the money.
The most aggressive type of assistance offered under the program – reduction of loan principal – hasn't been used much, because many lenders have been reluctant to participate.
But for the people who have received benefits, Keep Your Home California has offered a crucial lifeline. Take Orangevale resident Jack Hill, who credits the program for saving his home.
The 65-year-old mortgage industry executive lost his job in 2008 and had been trying to make ends meet with his unemployment and Social Security benefits.
Hill said he turned to the state program this summer. The state agency agreed to cover his $1,200-a-month mortgage payments for nine months.
"This really gave me some breathing room," Hill said.

Fifty lenders

Keep Your Home California, which is managed by the California Housing Finance Agency, has until 2017 to spend the $2 billion in federal money. Any dollars left over will go back to the federal government.About 50 banks, mortgage services and credit unions have agreed to participate with the housing agency.
To be eligible, a homeowner must be within the low and moderate income levels set for their county, and their home can't be worth more than $729,000.
The program offers as much as $3,000 a month for up to nine months for homeowners who have lost their jobs. It also provides up to $15,000 in mortgage assistance to homeowners who have fallen behind on their payments due to financial hardship.
In addition, the agency provides assistance to homeowners who have to relocate due to a foreclosure sale or a short sale, in which a bank agrees to take less than what is owed. This plan calls for a one-time payment of up to $5,000.
Homeowners also can seek to reduce the principal they owe on their houses. But the actual number of people who have benefited from this provision is low – about 475 – due to a lack of participation by several key lenders.
The banks have to match the amount of money the state agency invests in reducing the principal. Many say they are reluctant to do so because they have their own proprietary loan modification processes, Richardson said.
Greater use of principal reduction nationwide has also been blocked by the policies of Fannie Mae and Freddie Mac, the nation's largest guarantors of mortgages. The two companies, now controlled by the federal government, have declined to agree to principal reductions on mortgages they either own or have packaged into securities – the majority of mortgages nationwide.
In published reports, the Federal Housing Finance Agency, which oversees Fannie and Freddie, has said reducing principal could hurt taxpayers.
Peter Swire, an Ohio State University law professor who was President Barack Obama's point man on loan modifications, said he believes principal reductions are among the best ways to keep distressed borrowers in their homes.
"When a family is way underwater on their mortgage, they realize that they probably will never again have equity in that house," said Swire. "Principal reduction takes underwater families and puts their noses above water."

Barely a dent

Consumer advocates say the $2 billion program should reach far more than 7,000 people.Those kinds of results barely make a dent in the state's mortgage crisis, which sees more than half a million new foreclosures each year, said Paul Leonard, California director for the Center for Responsible Lending.
The program currently spends about $16 million a month in homeowner assistance. At that pace, it would take about 10 years to exhaust the federal stimulus money set aside for the program.
"I think it is deeply troubling that there is the possibility that money committed to provide assistance to avoid … foreclosure is going to go unspent," Leonard said.
Richardson said she expects the program to rapidly expand as more banks agree to participate. In August, Bank of America Corp., the nation's largest lender, signed on.
"I still think we will be able to get all of the money spent," she said.
Homeowners such as Laurie Connerly say they're just happy the program is available to them.
The 50-year-old Roseville resident said she's been in and out of work for the past five years, out most recently in June when she was laid off from her job as a loan processor.
Connerly said she sought to modify the loan on her two-bedroom home, but her bank rejected her after a year in which she waited for an answer.
Her savings depleted and retirement tapped out, Connerly said, a friend steered her to the Keep Your Home California program, which agreed to cover her $745 monthly mortgage payments for six months.
Connerly hopes that will give her enough time to find a job.
"This totally saves me," she said. "I would have (lost) the home to foreclosure or a short sale."

Red Raiders stun No. 3 Sooners with historic win in Norman

By David Just
Texas Tech had everything stacked against it before its 41-38 upset victory against No. 3 Oklahoma on Saturday at Memorial Stadium.
NORMAN,Okla.– Texas Tech had everything stacked against it before its 41-38 upset victory against No. 3 Oklahoma on Saturday at Memorial Stadium.
The Red Raiders were reeling after a pair of close home losses to ranked foes. They had two injured defensive starters that were unable to make the trip. Tech was a 29-point underdog, playing a team that had won 39 consecutive home games – a streak that dates back to Sept. 3, 2005.
And, on the second play of the game, starting center Justin Keown limped off the field with a knee injury.
Yet the unranked Red Raiders still managed to earn a win – a convincing win – that damaged Oklahoma’s BCS National Championship hopes.
“We pulled it off,” quarterback Seth Doege said. “Everybody didn’t think we could. Nobody except the people that are associated with Texas Tech football had any faith in us winning this game.”
The Sooners became the highest-ranked opponent the Red Raiders have beaten on the road in the program’s history. Tech led by as much as 24, which was 10 points more than Oklahoma had trailed to any team at home since 2006.
Even coach Tommy Tuberville was in shock at what transpired.
“How does something like this happen?” he asked. “Especially after the last two games that we didn’t play very well and had a chance to win both of them.”
The Tech defense gave up just 50 yards in the second quarter and, during a stretch that spanned the second and third quarters, forced six consecutive three and outs.
The Red Raiders used that momentum to build a 31-7 lead that proved to be too much for the Sooners, who twice got within one score of the lead in the second half.
Oklahoma kicker Mike Hunnicutt missed a 28-yard field goal attempt – kicking the ball into the right upright – with 2:52 left in the fourth quarter that turned out to be the difference in the game.
Landry Jones connected on a 22-yard touchdown pass to tight end James Hanna with 1:10 remaining that brought the Sooners within three. But the onside kick that followed fell into the hands of Aaron Crawford, ending the game.
“They’re the No. 3 team in the nation, in some polls No. 1,” Tech free safety D.J. Johnson said. “And having not lost in 39 games, to come out here and get the job done, it just shows how much heart and how much fight we have.”
The opening kickoff was delayed 94 minutes by lightning, and the game – which was nationally televised on ABC -- didn’t end until 12:28 a.m.
The delay gave the Red Raiders an extra hour and a half to think about last year’s 45-7 drubbing at the hands of the Sooners, which junior wide receiver Alex Torres called an “embarrassing” loss.
Tuberville said the team had been thinking about that loss for quite some time.
“I talked about it all week with the guys,” Torres said, “how embarrassing it was, that sense of failure when we came out here and didn’t perform the way we knew we can. … We wanted to show everybody what kind of team we really do have. Like I’ve said before, we’re a real resilient team and we have a lot of fight in us.”
Torres was integral in building Tech’s large lead. The junior racked up 94 yards on four catches, three of which were touchdowns.
Two of the touchdowns came on perfectly executed tunnel screens in the first half. Doege found Torres for a 44-yard catch and run that put Tech up 7-0 little more than a minute into the game, then ran the exact same play midway through the second quarter for a 30-yard touchdown. That score put Tech up 21-7.
Offensive coordinator Neal Brown was right on the money calling the plays when he did, executing both when the Sooners’ defensive front blitzed.
“We got them in a down and distance where I felt like they would blitz,” Brown said. “And we caught them in two blitzes on both those big plays for touchdowns.”
Donnie Carona made both of his field goal attempts, connecting from 37 and 40 yards.
Doege finished with 441 passing yards, four touchdowns and no interceptions.
The Sooners entered the game with the 11th-ranked scoring defense in the nation and gave up more points than they had in their last three victories combined.
Tech, which ranked 111th in rush defense, surrendered a 55-yard run on Oklahoma’s first series. Then the Red Raiders gave up only 69 yards on the ground the rest of the way.
“They whipped us in every part of the game,”Oklahoma coach Bob Stoops said. “I told the players we were definitely outcoached and outplayed.”
It’s a signature victory for Tuberville, who in his second year at Tech was still trying to win over a divided fan base.
“It’s a huge game for recruiting and for national stature,” Tuberville said. “Obviously you don’t read too much about Texas Tech, haven’t seen too much on TV. I bet you see it the next few days.