Governor Demonstrating Leadership in Foreclosure Crisis
Strong leadership coming from the Governor on the sub-prime mortgage/real estate/foreclosure crisis that is disproportionately impacting California. The Governor is demonstrating that there are important, positive steps that can be taken without resorting to big government bailouts that often make the situation worse.
From the Governor's office:
The Governor Is Working With Four Major Loan Servicers And Calling On Others To Take Action To Prevent More Home Losses. Loan servicers from Countrywide, GMAC, Litton and HomeEq, who together service more than 25 percent of subprime mortgage loans issued nationwide, agreed today to streamlined "fast-track" procedures to help keep more subprime borrowers in their homes.
Immediate Action Could Save Thousands Of Homes. Action is critical considering a half million Californians have subprime loans that will jump to higher rates in the next year and a half.
The Governor Encourages All Of California's Lenders To Act. Governor Schwarzenegger is the first to spur servicers to publicly commit to modifying loans in a streamlined and scalable manner and he is encouraging others to take action.
This Action Builds Off Other Proposals To Help Homeowners Facing Financial Turmoil. Today's action builds off a proposal put forward by Federal Deposit Insurance Corporation (FDIC) Chair Sheila Bair that encourages lending agencies to keep subprime mortgage borrowers at their initial interest rate if they are living in their home and making timely payments, but can't afford the loan "re-set"--or jump to a higher rate.
The Governor Is Urging Consumers To Be Proactive. Consumers should contact their lender if they believe they are eligible for the loan restructuring.
Consumer Resources Are Available. The Governor is encouraging consumers to utilize:
The "HOPE Hotline" (1-888-995-HOPE or www.995HOPE.org), which provides free mortgage counseling 24 hours a day, seven days a week.
The state's English and Spanish language consumer mortgage information websites which include helpful information for prospective homebuyers, as well as homeowners who are experiencing difficulty in keeping payments current: www.yourhome.ca.gov and www.sucasa.ca.gov.
Statewide Outreach Will Be Expanded. Through a statewide outreach campaign, which will include public service announcements, the Governor will help reinforce the importance of contacting lenders and getting help.
The Governor Is Committed To Protecting The American Dream.
The Governor Will Continue To Work With State And Federal Partners To Address The Foreclosure Crisis. The Governor has pledged to work with state lawmakers in the coming year and will continue to lobby Congress to raise federal loan limits so that more California families can take advantage of these secure products, rather than relying on subprime loans.
Already this year, the Governor:
Signed legislation to increase protections for Californians who own or plan to purchase homes and to expand affordable housing opportunities.
Directed his Cabinet to form the Interdepartmental Task Force on Non-Traditional Mortgages which consists of leadership from two agencies and seven departments. California was one of the first states in the nation to form a task force to examine the alarming developments in the non-traditional mortgage market.
Made $1.16 million in Community Development Block Grant funds available to counties for consumer counseling and urged Congress to provide more funding for these programs in California.
Why Immediate Action Is Critical
Almost One Quarter Of The Nation's Foreclosures Filings Are In California. During the third quarter, 148,000 of 635,000 foreclosure filings nationwide were in California, with 51,259 in September alone.
Seven Of The Top Sixteen Metropolitan Areas With The Highest Rates Of Foreclosures In The Nation Are In California. In the Stockton, Riverside/San Bernardino, Sacramento, Bakersfield, Oakland, Fresno and San Diego metropolitan areas, there was an average rate of approximately one foreclosure filing for every sixty households in the third quarter.
Foreclosure Rates In California Continue To Skyrocket. The foreclosure rate in California has increased more than 35 percent in the last quarter and increased almost 250 percent from September 2006 to September 2007.
The Foreclosure Crisis Devastates Families, Hurts Neighborhoods And Depresses Our Economy. Foreclosures bring property values down across California. A recent U.S. Senate Joint Economic Committee (JEC) report estimates that more than $23.6 billion will be lost in property value over the next two years because of foreclosures in California.
The Center for Responsible Lending estimates that 8.4 million neighboring homes in California will experience devaluation because of subprime foreclosures on loans originated in 2005 and 2006.
More foreclosures mean fewer state tax dollars. Over the next two years, it is estimated that California will lose nearly $111 million in tax revenue from forecasted foreclosures and the spillover effect on neighboring properties.
From the Governor's office:
The Governor Is Working With Four Major Loan Servicers And Calling On Others To Take Action To Prevent More Home Losses. Loan servicers from Countrywide, GMAC, Litton and HomeEq, who together service more than 25 percent of subprime mortgage loans issued nationwide, agreed today to streamlined "fast-track" procedures to help keep more subprime borrowers in their homes.
Immediate Action Could Save Thousands Of Homes. Action is critical considering a half million Californians have subprime loans that will jump to higher rates in the next year and a half.
The Governor Encourages All Of California's Lenders To Act. Governor Schwarzenegger is the first to spur servicers to publicly commit to modifying loans in a streamlined and scalable manner and he is encouraging others to take action.
This Action Builds Off Other Proposals To Help Homeowners Facing Financial Turmoil. Today's action builds off a proposal put forward by Federal Deposit Insurance Corporation (FDIC) Chair Sheila Bair that encourages lending agencies to keep subprime mortgage borrowers at their initial interest rate if they are living in their home and making timely payments, but can't afford the loan "re-set"--or jump to a higher rate.
The Governor Is Urging Consumers To Be Proactive. Consumers should contact their lender if they believe they are eligible for the loan restructuring.
Consumer Resources Are Available. The Governor is encouraging consumers to utilize:
The "HOPE Hotline" (1-888-995-HOPE or www.995HOPE.org), which provides free mortgage counseling 24 hours a day, seven days a week.
The state's English and Spanish language consumer mortgage information websites which include helpful information for prospective homebuyers, as well as homeowners who are experiencing difficulty in keeping payments current: www.yourhome.ca.gov and www.sucasa.ca.gov.
Statewide Outreach Will Be Expanded. Through a statewide outreach campaign, which will include public service announcements, the Governor will help reinforce the importance of contacting lenders and getting help.
The Governor Is Committed To Protecting The American Dream.
The Governor Will Continue To Work With State And Federal Partners To Address The Foreclosure Crisis. The Governor has pledged to work with state lawmakers in the coming year and will continue to lobby Congress to raise federal loan limits so that more California families can take advantage of these secure products, rather than relying on subprime loans.
Already this year, the Governor:
Signed legislation to increase protections for Californians who own or plan to purchase homes and to expand affordable housing opportunities.
Directed his Cabinet to form the Interdepartmental Task Force on Non-Traditional Mortgages which consists of leadership from two agencies and seven departments. California was one of the first states in the nation to form a task force to examine the alarming developments in the non-traditional mortgage market.
Made $1.16 million in Community Development Block Grant funds available to counties for consumer counseling and urged Congress to provide more funding for these programs in California.
Why Immediate Action Is Critical
Almost One Quarter Of The Nation's Foreclosures Filings Are In California. During the third quarter, 148,000 of 635,000 foreclosure filings nationwide were in California, with 51,259 in September alone.
Seven Of The Top Sixteen Metropolitan Areas With The Highest Rates Of Foreclosures In The Nation Are In California. In the Stockton, Riverside/San Bernardino, Sacramento, Bakersfield, Oakland, Fresno and San Diego metropolitan areas, there was an average rate of approximately one foreclosure filing for every sixty households in the third quarter.
Foreclosure Rates In California Continue To Skyrocket. The foreclosure rate in California has increased more than 35 percent in the last quarter and increased almost 250 percent from September 2006 to September 2007.
The Foreclosure Crisis Devastates Families, Hurts Neighborhoods And Depresses Our Economy. Foreclosures bring property values down across California. A recent U.S. Senate Joint Economic Committee (JEC) report estimates that more than $23.6 billion will be lost in property value over the next two years because of foreclosures in California.
The Center for Responsible Lending estimates that 8.4 million neighboring homes in California will experience devaluation because of subprime foreclosures on loans originated in 2005 and 2006.
More foreclosures mean fewer state tax dollars. Over the next two years, it is estimated that California will lose nearly $111 million in tax revenue from forecasted foreclosures and the spillover effect on neighboring properties.
posted by Ron Nehring at
12:14 PM
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