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November 30, 2007
Schwarzenegger, Servicers Agree To Foreclosure Prevention Plan
Gov. Arnold Schwarzenegger 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.
Posted by S. Germain at November 30, 2007 09:10 AM