In mortgage news, California takes one more step towards solving the foreclosure crisis, while Congress delays talks. Governor Schwarzenegger signed a bill Tuesday designed to help Californians keep their homes.  According to the Governor, approximately 500 thousand Californians have subprime loans that will adjust within the next two years. "Foreclosures not only devastate families, they hurt neighborhoods and depress our economy and our budget," said Schwarzenegger, via news release. SB 1137, authored by Senate President Pro Tem Don Perata, will require mortgage holders to notify homeowners at least 30 days before issuing a notice of default and will double the amount of time renters have to move before they are evicted from foreclosed properties. The bill also provides local governments with the power to impose penalties on lenders who do not maintain foreclosed properties, a move that will hopefully prevent neighborhoods from becoming rundown. 

The Governor says that the new bill “is one more tool to help [Californians] stay in their homes - without government subsidies.”  SB 1137 was two years in the making and will take effect in 60 days. While California moves forward in the fight against foreclosures, Congress is taking their time in regards to foreclosure issues. Brian Montgomery, the Federal Housing Administration’s, or FHA’s, Assistant Secretary for Housing criticized Congress for delaying their talks on the upcoming FHA Secure expansion. FHA Secure is a refinancing option that gives homeowners with non-FHA adjustable rate mortgages, or ARMs, who are in good standing with their lender, the ability to refinance into a FHA-insured mortgage.  The updated program was scheduled to begin on July 14th, but according to Montgomery, Congress has “continued to debate and debate” and has not made any decisions.  As part of a recent stimulus package, Congress had temporarily increased loan limits in March, and those limits continue to be and issue in regards to the FHA Secure expansion.  Montgomery, who feels loan limits may have been raised too much, supports "appropriate and long-term changes" and encouraged Congress to take action.  For more information on the FHA Secure program, visit www.hud.gov and click on FHA Secure.