Gov. Schwarzenegger Highlights Subprime Mortgage Agreement’s Progress in Preventing Foreclosures
October 30, 2008 – (RealEstateRama) — Governor Arnold Schwarzenegger today issued the following statement regarding the third quarter of 2008 mortgage servicer survey results. The latest data, released by the Department of Corporations who tracks and reports loan modification statistics, shows continued success for the Governor’s Subprime Mortgage Agreement from November 2007 to the present time.
“We must take whatever steps we can to avoid foreclosures, modify loans and help people stay in their homes. A year ago, I announced that, in partnership with the FDIC, we had taken action and reached an agreement with major lenders to freeze interest rates for homeowners most at risk and how this could help keep more Californians in their homes. I am pleased to say that with the continued cooperation from loan servicers, we have kept tens of thousands of people from being added to the foreclosure lists. We are continuing to work with the FDIC on other actions to modify loans-in fact I will be meeting with them tomorrow at IndyMac. We will also propose additional steps in the special session that I will call for next week.
“As I stated last week, it is also very important that loans purchased by the federal government under its recently enacted $700 billion financial rescue plan be modified to the fullest extent possible. Not only will more Americans stay in their homes as a result, but our economy in California and across the country will benefit tremendously from reduced mortgage burdens.”
When the monthly numbers are combined as quarterly figures, the count of loan modifications rose from 20,594 in the first quarter of 2008 to 30,151 in the second quarter and to 38,085 in the third quarter. This represents a 46.4 percent increase from the first to the second quarter and an 84.9 percent increase from the first to the third quarter of this year. Especially important is that the total number of loan modifications – the type of workout most beneficial to consumers – rose significantly to 14,060 in September, the highest monthly count since reporting began. Also important is that modifications as a share of total workouts passed 50 percent for the first time in September.
Just last month, Governor Schwarzenegger’s task force on non-traditional mortgages announced a dramatic increase in the number of California homeowners who have taken action in the wake of rising mortgage payments and seeking help through the HOPE hotline. The Homeownership Preservation Foundation who administers the national HOPE hotline released a report of California statistics for January 2008 to the present, indicating a nearly 300 percent increase in the numbers of homeowners calling and receiving one-on-one counseling sessions through the non-profit, HUD-approved provider.
To view the latest loan modification survey results or find more information on the Governor’s Subprime Mortgage Agreement, visit http://www.corp.ca.gov/press/news/SubprimeLending.asp.
