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US taxpayers bail out California homeowners

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    William La Jeunesse reports from Los Angeles

  • Duration 2:33
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Some new controversy over the bailout of underwater homeowners in California under the federal program.

The government and commercial banks were supposed to help pay down mortgages splitting the costs 5050.

But the banks are holding on to their money leaving taxpayers to pick up the task.

When large masses in -- -- Los Angeles to explain William.

Well John you remember taxpayers were told they would not bear the full brunt of the housing crisis that responsible.

Homeowners would not be required to -- the banks and the sometimes undeserving sometimes -- homeowners.

Who owe more on their mortgage and the homes are worth well that is exactly what is happening with.

Your money.

They're -- my monthly mortgage.

Payment of 2578.

-- is you American taxpayers are paying event premiere -- mortgage for six months after her husband lost his job.

Where that money dries up Ramirez hopes for even more government help.

Am hoping because -- -- qualify for this that we made and well be able to qualify for that next.

Principal reduction.

That means a reduction or write down ever mortgage principle under the keep your home program to this part of the plan will require both buyers and lenders.

To step up and do their part to take on.

Some responsibility yet banks receiving billions in bailout money we're not required to step up and pay half of the mortgage write down.

The other half coming from government.

So we thought you know 5050.

Was much more attractive and we have much mark.

Traction with lenders and it just it just didn't turn out to work as well as we would've liked.

Last month California became the first state to use 100%.

Taxpayer dollars to reduce homeowner's mortgages by up to 100000.

Dollars.

I think taxpayers be furious at the idea again that everybody gets completely off hook.

Princess -- California officials defend the program.

-- acutely aware at every home that goes into foreclosure in my neighborhood.

My property values are going down so we can help save some of these people you know that's that's to my benefit.

So nineteen states received eight billion dollars to buy down mortgages most states have refused to go all in.

Fearing John that would encourage people to abuse the system because other.

When banks refused to do anything California decided -- -- a percent as a consequence were only helping about 9000 homeowners for than 24000.

Because such a large chunk is going to so few homeowners.

John wanna mess.

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