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CalSTRS, CHF Platinum, CalHFA FHA Suspended?

calstrs calhfa chf suspendedCalSTRS, CHF Platinum, CalFHA suspended?  Yes, unfortunately so.

Notice I said “suspended” and not “terminated”.  These programs simply got kicked out of their home and are looking for a new place to live.

Why is this happening?  

A couple of months ago, Bank of America announced that it was leaving the correspondent lending business.

What does that mean to you?

Well, unfortunately Bank of America is the “master servicer” for many of the down payment assistance programs offered through the State of California as well as CalSTRS.

A master servicer basically underwrites and services the loan program for the entity/organization that offers the program.  The State of California, in the case of CHF Platinum & CalHFA FHA, is not a lender.  Neither is the California State Teachers Retirement System (CalSTRS).

The provider of these assistance programs count on a major financial institution like BofA to manage the program for them.

Well, Bank of America doesn’t want to play anymore.

Effective Immediately:

Bank of America is no longer supporting the CalHFA FHA & Cal30 first mortgage programs, CHF Platinum or the CalSTRS loans – These programs are temporarily and immediately suspended.

The Silver Lining?  Yes, there is one!

The CalHFA CHDAP Homebuyer Assistance program is still alive and well.  That’s good news.

If you live in Orange or Los Angeles Counties, take a close look at the SCHFA program.

The terminology being used here is “Suspended” – They are not announcing that the programs have been terminated.

The programs are actively looking for a new “master servicer” – with any luck, we’ll have all of our assistance programs back online before the end of the year!

Don’t Take Any Chances

If you are “pre-approved” with a lender and have not opened escrow (or locked the rate), it sounds like your plans have changed.

Please contact your loan officer immediately and see how this affects your ability to buy.  There may be other programs available that you can use.

At the very least, you’re going to have to come up with more money for down payment or closing costs.

I expect that this will be resolved soon.  There are many first time buyers in California that count on these programs to make homeownership possible.

I’m keeping a close eye on this – we’ll update you as soon as we hear anything.

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7 Responses to CalSTRS, CHF Platinum, CalHFA FHA Suspended?

  1. Shantell October 31, 2011 at 11:07 am #

    You are a lifesaver. Your knowledge about these programs is unparalleled. Broadview is first on my list when Im ready. Thank you.

  2. Scott Stephen Bell October 11, 2011 at 7:42 am #

    Good Morning Mr. [Katella],

    I am hoping you may have heard some different information concerning the CalSTRS loan not being “dead”. Having spoken with three different people in the CalSTRS home lending division – they all were quite emphatic that the loan is “dead” and that the only way it would come back is if/when the market recovers (one flat out told me not to expect it for several years). I followed up with my Bank of America service agent (with whom I had been pre-approved for a CalSTRS 80/17 loan) and she also confirmed the end of this loan. Have any other banks stepped in to save this one, or is it really as “dead” as the people at CalSTRS claim?

    • Legacy Content October 11, 2011 at 10:11 am #

      Good morning [Broadview],

      I share your disappointment but it looks like the 80/17 has run it’s course. CalSTRS does intend to release a loan program for eligible Golden State education employees, but it will be slightly different and quite a bit more strict in terms of credit qualifying.

      Although the 80/17 is a fantastic program – there are other programs available right now that may be equally as beneficial to new home buyers. Have you looked into the CHDAP program? What county are you in? There is an amazing homebuyer gift program for buyers in Los Angeles and Orange Counties right now.

      If you would like to explore some of these options – you can either give us a call, live chat or shoot me an email at [Broadview]S@Broadviewhome loan.com with the best time and number to reach you.

      Hope this helps?

  3. jessica October 6, 2011 at 2:06 pm #

    hi scott, i applied for an fha loan and have been confirmed grant assistance. I am opening escrow and want to know if this will effect me. since i was approved before the suspension will they still give me the grant?
    thanks for your input.

    • Legacy Content October 6, 2011 at 2:23 pm #

      Hi Jessica,
      A pre-approval (before you find a home and open escrow) does not really have a lot of meaning…other than giving you an idea of what you could qualify for. You will have to check with your lender to find out what stage of the approval process you were in and if the program is still available.

      I know that unless your rate was locked by Monday, you would be unable to use the program until they find another master servicer to offer it through.

      If you are unable to take advantage of CHF at this time, an FHA (at a lower rate than CHF) and the CalHFA CHDAP program might be a good alternative for you.

      CHDAP offers 3% of the purchase price as assistance. There are no payment on the assistance for the life of the loan and the interest rate has been 3.25% for about 5 years now!

      http://broadviewhome loanorange.com/home-buyers/chdap-california-homebuyers-downpayment-assistance-program/

      Here’s a link to get more information on this option, or just give us a call, live chat or shoot me an email with the best time and number to reach you and we can explore these options.

  4. Michael McLaughlin October 4, 2011 at 10:39 am #

    Hi [Broadview] – I’m way underwater on my Downey condo so I can’t get a refi. I’m considering walking away from it because I already own a 2nd home that I’m planning to retire to in a couple years.
    I have a conventional loan and a CALFHA assistance loan on the Downey Condo. What are your thoughts? Thanks

    Michael

    • Legacy Content October 4, 2011 at 11:09 am #

      Hey Michael – the secondary financing is what makes this tough. Back in July, Gov. Brown signed a bill that has made a pretty significant impact on the ability to get short sales offered. Here’s a snippet:

      SB 458 extends the protections of SB 931 to junior liens, effectively providing that any lender that agrees to a short sale must accept the agreed upon short sale payment as full payment of the outstanding balance of the loans.

      What this essentially means is that if a second lein holder allows a short sale – if there is no equity in the home and they get nothing…they are stuck with nothing and cannot come back to sue you for their losses (this protection can also be accomplished through filing BK)

      One option might be to contact your first lender and see if they have a “Cash for Keys” program – Here’s an article I wrote about this program:

      http://broadviewhome loanorange.com/consumer-protection/cash-keys/

      If you do choose to do a short sale – the Real Estate Agent you choose is VITALLY important. If the agent is not familiar with negotiating shorts sales, or if they do not have a service in place to do so, it could really turn into a nightmare and possibly result in a foreclosure anyhow.

      Hope this helps?

      Let me know if you would like a recommendation for a short sale agent to help with all the paperwork and the negotiation – I’ve know some great people!