Schwarzenegger Signs Foreclosure Relief Bill

California Governor Arnold Schwarzenegger has signed a bill designed to stem the tide of foreclosures in the state.

The bill SB 1137 by Senate President Pro Tem Don Perata requires mortgage lenders to contact homeowners and explore restructuring options before initiating the foreclosure process.

In a signing ceremony in Oakland, Gov. Schwarzenegger said, "I am proud to announce that we are giving Californians one more tool to help them stay in their homes - without government subsidies. Half a million Californians have subprime loans that would jump to higher rates over the next two year."

The bill also presents local governments with the authority to fine lenders who fail to maintain foreclosed properties. The bill is expected to take effect in 60 days.

In the first six months of 2008, lenders took back 1,463 homes, which is an increase from 286 homes over the same period in 2007.