California is revamping its efforts to aid homeowners who owe more on their mortgages than their homes are worth. The program was launched as part of an Obama administration push to let states work out their own responses to the foreclosure crisis. California, Nevada and Arizona – states with steep home-price declines — chose to aid “underwater” homeowners. But the states had trouble getting going after mortgage-finance giants Fannie Mae and Freddie Mac refused to allow loan write-downs and much of the lending industry (with the notable exception of Bank of America) declined to participate. Effective next month, California has eliminated a requirement that mortgage-servicing firms provide a 100% match of federal funds. The program will now fund up to $100,000 in principal write-downs, with no match required. As a result of the changes, the major obstacles to servicer participation should be cleared.