California Gov. Schwarzenegger Issues Statement Applauding Actions Boosting Mortgage Availability in California

04/17/2008 -- California Governor Arnold Schwarzenegger today issued the following statement after Fannie Mae, Freddie Mac, Wells Fargo Bank, Washington Mutual, CitiMortgage and JP Morgan Chase announced plans to provide billions of dollars of conforming jumbo mortgages in high cost locations.

Arnold Schwarzenegger: Photo courtesy California Governor's office

Their actions, which allow for loans as high as $729,750, stem from the new higher federal loan limits requested by Governor Schwarzenegger and included in the federal economic stimulus package signed by the President earlier this year.

"No single issue affects California's housing recovery more than access to mortgage credit that fits California's home prices. These actions will help more California families achieve the dream of homeownership and provide another tool in our effort to reduce foreclosures.

"I urged Congress to raise the conforming loan limits in order to provide Californians with more affordable mortgage options and I'm very pleased that call to action was answered, but I continue to urge the federal government to make these new higher limits permanent.

"Mortgage availability is critical to our housing market's recovery. I commend Fannie Mae, Freddie Mac, Wells Fargo, Washington Mutual, CitiMortgage and JP Morgan Chase for giving Californians living in high-cost markets more affordable mortgage choices."

To help Californians hit hard by the mortgage crisis, the Governor has:

* Led efforts urging Congress and the Bush Administration to raise federal loan limits. Last fall, the Governor sent a letter calling on Congress to increase those limits and sent a similar letter again earlier this year. After Congress and the President approved a temporary increase, the Governor asked them to make the increase permanent. In February, the Governor met with the U.S. Department of Housing and Urban Development Secretary in Washington D.C. to reiterate the importance of a permanent loan limit increase.
* Announced $69.5 million in permanent low-interest loans from the Proposition 1C housing bonds to jumpstart 14 affordable multi-family projects up and down the state, helping more than 1,000 California families and individuals realize the dream of an affordable rental home.
* Announced more than $72 million in federal HOME Investment Partnerships Program funds to provide assistance to first-time homebuyers, reduce the number of bank owned homes and increase the number of rental properties.
* Joined the OneCalifornia Foundation to announce a bridge loan fund for homeowners facing foreclosure in Oakland.
* Launched a $1.2 million public awareness campaign to help educate homeowners about options that can help them avoid losing their homes to foreclosures.
* Announced an agreement with major loan servicers to streamline the loan modification process for subprime borrowers living in their homes.
* Signed legislation to increase protections for Californians who own or plan to purchase homes and to expand affordable housing opportunities.
* Issued new regulations to protect borrowers, which requires lenders to consider a borrower's ability to repay at the higher reset interest rate and mandates closer scrutiny of risk features such as interest only payments, reduced documentation and simultaneous second liens.
* Established the Interdepartmental Task Force on Non-traditional Mortgages to ensure a comprehensive and coordinated approach to the issues raised by subprime loans.

Source: California Governor

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