Gov. Arnold Schwarzenegger, R-Calif., has teamed with loan servicers from Countrywide, GMAC, Litton and HomeEq to agree to streamline fast-track procedures designed to help keep more subprime borrowers in their homes. Together, the four firms service more than 25% of issued subprime mortgage loans.
The agreement Schwarzenegger negotiated with the servicers builds off a proposal put forward by Federal Deposit Insurance Corp. chairwoman Sheila Bair that encourages lending agencies to keep subprime mortgage borrowers at their initial interest rate if they are living in their home, making timely payments, but cannot afford the loan rate reset. A half-million Californians have subprime loans that will jump to higher rates in the next two years, the governor's office adds.
Through a statewide outreach campaign, which will include public service announcements, Schwarzenegger will help reinforce the importance for consumers to reach out to their lender if they are at risk of foreclosure, as well as continue to lobby Congress to raise federal loan limits.
Additionally, a California-specific Web site with helpful information for prospective home buyers, as well as homeowners who are experiencing difficulty in keeping payments current, is available at www.yourhome.ca.gov, and the Spanish-language version is www.sucasa.ca.gov.