July 23, 2008 > Gov. Schwarzenegger Signs Legislation to Help Protect Homeowners from Foreclosure
Gov. Schwarzenegger Signs Legislation to Help Protect Homeowners from Foreclosure
Submitted By Aaron McLear
Governor Arnold Schwarzenegger today 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 properties.
"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."
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 Governor has:
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 increase.
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.