California mortgage aid includes cash-out-loans

Soon after launching a $2 billion statewide mortgage assistance program, the California Housing Finance Agency said Tuesday it would loosen eligibility requirements – allowing owners who used their homes as cash machines during the boom to now receive some help.

The change to the Keep Your Home California initiative acknowledges just how many homeowners now in trouble tapped into their equity during the peak.

"It is a higher percentage than we were expecting," said Diane Richardson, the program manager. In January, after months of delays, the state launched the first phase of the federally funded effort. All four of the initiative's programs were up and running by early February.

The state's goal is to help more than 100,000 homeowners. To date, though, just 201 have received assistance through one of the four programs – at a cost of less than $1.5 million.