CalSTRS, 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.
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.