(July 24, 2008) Governor Arnold Schwarzenegger recently took action to help struggling California homeowners by signing SB 1137 (Perata; D-Oakland).

The bill establishes new processes for lenders to reach out to homeowners prior to foreclosure, providing them with additional information on the process and encouraging further efforts to avoid foreclosure wherever possible.  In doing so, SB 1137 provides tangible relief to California borrowers without arbitrarily limiting access to credit or discouraging the investments that are needed to restore liquidity to the state's housing market. 

The measure, a product of months of debate and discussion between legislators and stakeholders, represents a collaborative, bipartisan effort to improve the foreclosure process to the advantage of all Californians. 

In addition to helping borrowers avoid foreclosure, SB 1137 also does the following: 

• Provides additional time for tenants of foreclosed properties to make other housing arrangements prior to eviction.
• Creates new requirements for the maintenance of foreclosed properties to protect the surrounding neighborhoods.
• Becomes effective immediately due to an urgency clause. Absent such a clause, new laws do not take effect until January 1 of the year following their passage.

Additional Resources

The following additional resources are available for homeowners:

• The "HOPE Hotline" (1-888-995-HOPE or http://www.995hope.org/), which provides free mortgage counseling 24 hours a day, seven days a week.
• A website with helpful information for prospective homebuyers, as well as homeowners who are experiencing difficulty in keeping payments current is http://www.yourhome.ca.gov/ and its Spanish language version: http://www.sucasa.ca.gov/.