Governor Schwarzenegger Launches Public Awareness Campaign to Help Homeowners Avoid Foreclosure

Press Release

Governor Schwarzenegger Launches Public Awareness Campaign to Help Homeowners Avoid Foreclosure

Governor Seeks Relief for Military Personnel and Veterans

Governor Arnold Schwarzenegger today launched a public awareness campaign to educate homeowners about options that can help them avoid losing their homes to foreclosure.

"Our message is that lenders are willing to work with borrowers on finding a solution. But right now we are seeing homeowners who are afraid to even talk with lenders," said Governor Schwarzenegger. "In fact, loan officials have not been able to reach borrowers in more than half of all foreclosures. Some of these homes could have been saved, so seek out a solution now before it is too late."

The $1.2 million campaign - funded through existing consumer education efforts within the Business, Transportation and Housing Agency and the State and Consumer Services Agency - will:

* Inform borrowers about their options.
* Urge borrowers to work with lenders before foreclosure.
* Encourage the use of nonprofit housing counselors.
* Partner with local leaders and trusted organizations, like churches and community groups, to spread the message.

To assist California's veterans and active military personnel who are at risk of foreclosure, the Governor today directed the Department of Veterans Affairs to work with his non-traditional mortgage task force to address this issue. The group will explore ways the CalVet Home Loan program can provide a fixed rate CalVet loan to active military personnel and veterans who qualify and currently have subprime loans.

"The housing crisis affects everyone, including members of our military and veterans, which is why I have also directed the California Department of Veterans Affairs to explore steps we could take to help qualified veterans and active duty personnel refinance subprime loans into safer, fixed-rate loans," said Governor Schwarzenegger.

A half million Californians have subprime loans that will jump to higher rates within the next two years. Seven of the top sixteen metropolitan areas with the highest rates of foreclosures in the nation are in California, according to the latest data from RealtyTrac.

"Everyone agrees that borrowers and lenders both made mistakes and should have been more prudent. But we also know that foreclosures are not good for anyone whether it is lenders, borrowers, neighbors, the economy or the state budget. We want to see borrowers and lenders working together to avoid as many foreclosures as possible and to keep more California families in their homes," said Governor Schwarzenegger.

Earlier this month, Governor Schwarzenegger announced an agreement with four loan servicers - representing 25 percent of the market - to streamline the loan modification process for subprime borrowers living in their home, making timely payments and likely to default when their loan jumps to a scheduled higher rate. All lenders are asked to subscribe to that agreement, which may be found at http://www.corp.ca.gov/notices/subprime.html.

This year, Governor Schwarzenegger signed legislation to increase protections for Californians who own or plan to purchase homes and to expand affordable housing opportunities. The Governor has also pledged to work with lawmakers in the coming year to take additional steps to protect homebuyers.

The Governor has also lobbied Congress to raise federal loan limits so that more California families can take advantage of those products.

Earlier this year, the Governor directed his Cabinet to form the Interdepartmental Task Force on Non-Traditional Mortgages. 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. The task force consists of leadership from two agencies and seven departments responsible for all aspects of this complex issue.

In September, the Governor 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.

The following additional resources are available for homeowners:

* The "HOPE Hotline" (1-888-995-HOPE or http://www.995hope.org/), which provides free mortgage counseling 24 hours a day, seven days a week.
* A website with helpful information for prospective homebuyers, as well as homeowners who are experiencing difficulty in keeping payments current: http://www.yourhome.ca.gov/ and the Spanish language version: http://www.sucasa.ca.gov/.

Source