Governor Schwarzenegger Announces Additional $7.8 Million Federal Grant to Help California Homeowners

Press Release

Governor Schwarzenegger Announces Additional $7.8 Million Federal Grant to Help California Homeowners

Governor Arnold Schwarzenegger today announced that more California homeowners having trouble paying their mortgages will be eligible for free counseling on how to avoid foreclosure. In addition to the $8 million federal grant announced earlier this year, California has attained a $7.8 million federal grant to expand counseling services for homeowners.

"The most powerful thing we can do for our economy right now is keep families in their homes, and mortgage counseling will help do just that," said Governor Schwarzenegger. "Working with community-based organizations we have been able to provide counseling for thousands of California families facing the potential of foreclosure. This new funding will allow us to expand these counseling services in our efforts to help keep more Californians in their homes."

The California Housing Finance Agency and HUD-approved counseling groups in partnership with the Rural Community Assistance Corporation (RCAC) were awarded the $7.8 million grant in addition to the previous $8 million grant awarded to California earlier this year. The grants are part of new federal program enacted in late 2007 to help homeowners avoid foreclosures.

"This is a community-based effort made possible by our partnership with the Rural Community Assistance Corporation and their counseling partners who have the experience and commitment to work with borrowers facing possible foreclosure," said Theresa Parker, Executive Director of CalHFA.

Counseling is available to homeowners who have defaulted on their mortgages or are in danger of defaulting on their mortgages. Homeowners in those situations can arrange counseling by contacting one of the counseling agencies in their area or by visiting www.yourhome.ca.gov. Non-profit mortgage counselors provide a full range of services to homeowners for free and homeowners are encouraged to contact a HUD-approved counselor before responding to any solicitations from anyone offering the same services for a fee. Unfortunately, many unlicensed and unscrupulous people are preying on distressed homeowners. To learn more about avoiding these scams and to check this license of anyone offering help a homeowner avoid foreclosure for a fee visit: http://www.dre.ca.gov/mlb_adv_fees.html

The grant was provided by funds contingent upon a fully-executed grant agreement from the National Foreclosure Mitigation Counseling Program. Approved by Congress in the FY'08 Consolidated Appropriations Bill, the National Foreclosure Mitigation Counseling Program is administered through a competitive application process by NeighborWorks® America, within guidelines defined by Congressional legislation.

California has been impacted more than any other state by the national home foreclosure crisis and has taken aggressive steps to help homeowners facing problems with their mortgages. To help those hit hard by the subprime mortgage crisis, the Governor has:

* Announced an agreement with major loan servicers to streamline the loan modification process for subprime borrowers living in their homes
* Signed legislation to help protect homeowners by requiring a mortgage holder to provide a 30-day notice to a borrower prior to filing any default notice leading to the foreclosure. The new law also provides tenants of foreclosed properties a minimum of 60 days notice to move and requires holders of foreclosed properties to maintain the property.
* Launched a $1.2 million public awareness campaign to help educate homeowners about options that can help them avoid losing their homes to foreclosures.
* Established the Interdepartmental Task Force on Non-traditional Mortgages to ensure a comprehensive and coordinated approach to the issues raised by subprime loans.
* Announced $5.6 million to help mortgage and banking industry workers laid off as a result of the subprime crisis make career transitions to high-demand jobs in other industries.

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