As a full-time student, physical therapist assistant and homeowner, Michelle was nearly overwhelmed.

Between rising tuition and a mortgage payment that had just increased, she was worried that a default was just around the corner. Decreasing property values left her in a position where she was unable to qualify for existing refinance programs.

Being proactive by nature, Michelle worked with a local nonprofit counselor to explore other potential options and learned about a principal reduction program being offered through Keep Your Home California. “I didn’t want to wait,” Michelle says. “I’d never been late on my mortgage payment because I knew it would just add more stress to my life. I knew I wanted to keep my home – walking away just wasn’t an option for me.”

After her over-the-phone counseling session with Keep Your Home California, Michelle was quickly qualified for a principal reduction of $50,000. Paying down her principal meant restructuring Michelle’s mortgage payment to a level she could easily afford. “I never had credit card debt,” says Michelle. “But I was living paycheck to paycheck. With both my school costs and mortgage payments increasing, I wasn’t sure how I would be able to continue to make ends meet.  Now I not only have a mortgage payment I can afford, I also have enough money to take some extra classes and get my degree sooner.”

Adding a principal reduction component to the Keep Your Home California suite of programs was a necessity according to California Housing Finance Agency executive director, Claudia Cappio. “Property values have decreased significantly in California, leaving many borrowers with so much negative equity they are not able to take advantage of the numerous refinance programs that are already available. The Principal Reduction Program was specifically created to help homeowners who are serious about living in their homes and creating longer term stability for their families by giving them an opportunity to qualify for a more sustainable modification. It certainly isn’t a panacea, but for a lot of families who don’t have any other options available to them, we believe this is a good and fair solution.”

It was certainly the answer Michelle Vera was looking for. “For me, this is a permanent solution to my mortgage problems.”

Homeowner Abigail M. has a hard-to-beat connection that introduced her to Keep Your Home California.

When Abigail of Stockton lost her accounting and executive secretary position in the homebuilding industry in late 2010, she was like many Californians — concerned about how to make ends meet, especially her mortgage payments.

“I worried that if we ran out of unemployment benefits, we were going to be homeless,” says Abigail, whose husband was battling kidney cancer and recovering from surgery at the time.

So, Abigail checked into different government housing assistance programs with little luck. She attended foreclosure prevention workshops to learn more about her options. And she even reached out to her local elected representatives and President Obama.

“I found out about the program by writing a letter to President Obama,” says Abigail, who received information about Keep Your Home California from the U.S. Treasury Department. “Thank God, people read those letters.”

Indeed, the department gave her information about the $2 billion mortgage assistance program that was established with federal funding approved by President Obama.

She applied and was approved for the Unemployment Mortgage Assistance Program in November 2011.

“The packet was easy to follow,” Abigail says.

The couple received nine months of mortgage assistance from the state-run program, giving them some financial breathing room during a very difficult period.

“I tell everybody” about Keep Your Home California, says Abigail, adding many homeowners continue to suffer in Stockton, often reported as the hardest-hit community for foreclosures in the nation. “I look at prices in my subdivision, and it breaks my heart. Unfortunately, I’ve run into some high school friends who need help.”

“It’s been a hard road,” Abigail. “If you guys weren’t here, I can’t imagine what would have happened to a lot of us.”

Retired teacher Alpha R. got a firsthand lesson on the sometimes fast-paced foreclosure process – and the home-saving help from Keep Your Home California.

When Alpha got behind on her mortgage payments and received a foreclosure notice from her mortgage servicer in early 2012, she needed quick action to save her home in Yucca Valley in the High Desert of Southern California.

“I bugged everybody; I even called my Congressman’s office,” says Alpha, who was raised in New York City but has also lived in Atlanta, Tucson, and Virginia.

Then, she came across a housing counseling agency that made her aware of Keep Your Home California. She quickly completed the documents in hopes of stopping the foreclosure.

“I was scrambling to put the paperwork together,” says Alpha, who was playing beat the clock with the mortgage servicer. “There was literally a man outside my gate one day (looking to purchase the property).”

She applied for Keep Your Home California’s Mortgage Reinstatement Assistance Program, which offers as much as $25,000 to help hard-hit homeowners catch up on their payments. Alpha received $20,000 from the state-run program, enough money to get her back on track.

“It was tough, but it was doable,” Alpha says of the paperwork needed for the program. “Keep Your Home California was very smooth, very efficient.”

Now, Alpha can focus on a new project. She has opened a healing facility that encourages others to eat healthier and meditate.

“This is my purpose,” says the retired public school teacher for emotionally challenged students. “I still have things to do up here.”

With financial assistance from Keep Your Home California program, Alpha can turn her attention toward helping others.

“It was the best program I’ve ever run into,” says Alpha, who tells friends about the free, federally funded program. “There is something positive out there. You don’t have to give up.”

Homeowner Wayne M. has counseled many families looking for the American Dream – and those living through a real-life nightmare.

It’s been more the latter in recent years, as hard-hit homeowners struggle with their mortgage payments and try to fend off foreclosure. Many cash-strapped homeowners ask for help months after they get behind on their mortgage and have received multiple late payment notices from their servicer.

“Some people are very reluctant” to ask for help, says Wayne, a homeownership counselor for Neighborhood Housing Services of Los Angeles County. “You ignore the problem; you think it will go away. You just try to forget about it.”

But it doesn’t. Just ask Wayne.

His full-time job is to help homeowners apply for government assistance programs such as Keep Your Home California. Wayne is also a client of the state-run program. He was recently approved for the Mortgage Reinstatement Assistance Program, which offers as much as $25,000 to help homeowners catch up on their mortgage payments.

“Just a little tweak and you can get people back to normal,” he says. “The little tweak really helped me out.”

Now, the Los Angeles County homeowner is back on track with his mortgage payments and his financial footing.

“Basically, it bought me some time … gave me some breathing room,” says Wayne, who is married and has three children. “I talk it up at events, even when I’m in the grocery store. I’m not only a counselor, but a client.”

His firsthand experience helps homeowners interested in the program.

“They’re a lot more receptive” when they learn of his participation in the federally funded program. “They see that you really have their interest and you know their situation.”

But he says more homeowners need to look into the program.

“It doesn’t make sense for people not to try and for banks not to participate,” Wayne says. “It can work for so many people.”

Longtime mortgage professional Laurie C. entered the fast-paced business because she “likes helping people.”

Now, Laurie – who has enjoyed a 20-year career in the home lending industry but has endured three recessions along the way – is getting a helping hand from Keep Your Home California.

Like many homeowners in California, Laurie has become a casualty of the dismal economy and the hard-hit housing market. She has been “in and out of work” for the past five years, as the housing market struggles through one of its worst downturns.

She was most recently laid off July 1, and soon after applied for Keep Your Home California’s Unemployment Mortgage Assistance Program. The state-run program helps out-of-work homeowners with their payments, up to a maximum of $3,000 per month for six months.

“I tried to do a modification … but they gave me the runaround for a year,” Laurie says. The Keep Your Home Program was different. “They had me qualified and eligible in 10 days.”

The mortgage servicer, which must participate in the program, approved the payment plan for Laurie a week later.

Keep Your Home California – established with $2 billion in federal funds through the U.S. Treasury’s Hardest Hit Fund® – started making her monthly $750 mortgage payment in September, and will continue through February, Laurie says.

“I don’t know what I’d be doing” without the mortgage assistance, says Laurie, who lives in a condominium in Roseville, about 20 miles northeast of Sacramento. “I totally believe in this program.”

Laurie often educates other financially strapped homeowners about the Keep Your Home California and how the program has helped her save her home.

“I’m out there selling it,” Laurie says. “I’m a true believer that things happen for a reason.”