California Gov. Schwarzenegger signs legislation to help protect homeowners from foreclosureMortgagePress.comGovernor Arnold Schwarzenegger, SB 1137, Don Perata, foreclosure, California Department of Corporations
Governor Arnold Schwarzenegger has signed SB 1137 by Senate
President pro Tem Don Perata (D-Oakland) which requires lenders to
contact homeowners and explore restructuring options before
initiating the foreclosure process. It will also provide tenants
with double the amount of time now afforded to them to move from a
foreclosed property and prevent California's neighborhoods from
becoming rundown by requiring owners to maintain foreclosed
"Foreclosures not only devastate families they hurt
neighborhoods and depress our economy and our budget," Governor
Schwarzenegger said. "So, I am proud to announce today that we are
giving Californians one more tool to help them stay in their homes
- without government subsidies. And I am confident that with this
legislation we will help even more Californians keep the American
Dream of homeownership alive."
Last week, the Department of Corporations announced the number
of loan modifications in California increased significantly in the
months of April and May over January, meaning state action to work
with lenders is helping Californians find more workable loans and
keep their homes.
To help Californians hit hard by the mortgage crisis, the
• Led efforts urging Congress and the Bush Administration
to raise federal loan limits. Last fall, the Governor sent a letter
calling on Congress to increase those limits and sent a similar
letter again earlier this year. After Congress and the President
approved a temporary increase, the Governor asked them to make the
increase permanent. In February, the Governor met with the U.S.
Department of Housing and Urban Development Secretary in Washington
D.C. to reiterate the importance of a permanent loan limit
• Announced $69.5 million in permanent low-interest loans
from the Proposition 1C housing bonds to jumpstart 14 affordable
multi-family projects up and down the state, helping more than
1,000 California families and individuals realize the dream of an
affordable rental home.
• Announced more than $72 million in federal HOME
Investment Partnerships Program funds to provide assistance to
first-time homebuyers, reduce the number of bank owned homes and
increase the number of rental properties.
• Joined the OneCalifornia Foundation to announce a bridge
loan fund for homeowners facing foreclosure in Oakland.
• Launched a $1.2 million public awareness campaign to
help educate homeowners about options that can help them avoid
losing their homes to foreclosures.
• Announced an agreement with major loan servicers to
streamline the loan modification process for subprime borrowers
living in their homes.
• Signed legislation to increase protections for
Californians who own or plan to purchase homes and to expand
affordable housing opportunities.
• Issued new regulations to protect borrowers, which
requires lenders to consider a borrower's ability to repay at the
higher reset interest rate and mandates closer scrutiny of risk
features such as interest only payments, reduced documentation and
simultaneous second liens.
• Established the Interdepartmental Task Force on
Non-traditional Mortgages to ensure a comprehensive and coordinated
approach to the issues raised by subprime loans.
For more information, visit www.gov.ca.gov.