BURBANK, Calif. -- Finally, a government bail-out that helps regular people, not just Wall Street corporations.
That's the sentiment among some residents from Riverside to San Diego, as the feds and state lawmakers moved forward with efforts to head off future foreclosures, including thousands more expected in southern California.
The Federal Housing Finance Agency took over Fannie Mae and Freddie Mac, the largest U.S. mortgage finance companies, several weeks ago. Today, its managers announced a plan -- going into effect next month -- to help homeowners with delinquent mortgages make their payments and stay in their houses.
"The program targets the highest risk borrowers," said James Lockhart, FHFA director, "who have missed three payments or more and own or occupy their property."
Among communities hardest hit by the mortgage crisis -- recording thousands of residents who are unable to pay monthly bills that have doubled or even tripled -- the Inland Empire is near the top of the list. In neighborhoods like Riverside's Orangecrest, one in five houses is listed in some state of foreclosure.
Under the federal plan, interest rates would be reduced and some payments schedules could be extended to forty years.
FHFA's Commissioner, Brian Montgomery, said, "This is not loan forgiveness. The loans will be paid, but under terms that are affordable to borrowers."
In Sacramento, Assembly Democrats are pushing for similar relief this afternoon, a moratorium on banks and lenders that would keep them from filing default notices against homeowners for 120 days.
Assemblyman Ted Lieu, D-Torrance, outlined how bad the crisis has gotten for California. "In August of this year, we had 101,000 foreclosure filings, the most of any state...That's one filing about every thirty seconds."
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