“The Governor brokered a deal with lenders that will ensure some of these mortgages holders will get to stay in their homes.  The agreement freezes the initial teaser rate for people living in their homes and making timely payments,” said Marin. In 2007, 10,049 homeowners in the greater Sacramento region lost their homes.  Unfortunately, more bad news is expected for local homeowners with the continued rise in notices of default, issued by lenders after two or three missed payments. The desperate market has in turn increased fraud cases, from arson to mortgage scams. McGregor Scott, US Attorney for the Eastern District of California, says his office is seeing increasing numbers of fraud cases involving mortgages. 

Scott says crimes being prosecuted by his office involve all aspects of the industry including lenders, brokers and appraisers.  The crimes often deal with falsifying documents. Workshop speakers stressed the importance of communicating with lenders before their mortgage resets and avoid more desperate situations. “Homeowners should answer the phone when the bank calls and respond to their letters.  It is in their best interest for you to make your house payments.  Take the initiative to contact the lender and avoid the nightmare of foreclosure,” reiterated Senator Dave Cox. For homeowners who are facing higher mortgage payments but were not able to attend the workshop, call (888) 995-4673, or visit  www.yourhome.ca.gov to obtain more information. 

Senator Dianne Feinstein has introduced legislation that would require credit card companies to warn American consumers of the financial dangers of making only minimum monthly payments on credit card debt. “Many American consumers today receive no information from credit card companies on the dangers of carrying a balance with compounding interest, and the results are staggering,” Feinstein said. For example, the average American household has roughly $9,500 in credit card debt. If this household makes only the minimum monthly payment, it will take them 35 years to pay off their card – assuming 13.74 percent interest and no additional purchases. And so they would be paying $12,000 in interest on principal of $9,500. Feinstein says her bill will require credit card companies to fully inform consumers about the dangers of making minimum payments, including a warning on each monthly bill, and toll-free phone service for estimating the time and cost required to pay credit card balances. Another toll-free number to an accredited credit counseling service will also be required.