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 November 25, 2007

California Governor Arranges Loan Relief with Lenders
Gov. Arnold Schwarzenegger announced an unprecedented move designed to save thousands of homeowners from foreclosure in California. The voluntary deal was made with Countrywide Financial Corp. GMAC, Litton Loan and Home Eq. to freeze adjustable interest rates for high-risk borrowers. The plan applies to homeowners who are current with their mortgage payments and able to show they cannot afford the rate increase. It does not seem to apply to homeowners in foreclosure or behind in their payments.
The four lenders said they would contact the homeowner before adjusting their rates and streamline the loan modification system. The Governor asked the lenders to freeze the rates for five or more years. The lenders also agreed to let the state track the changes.

Hopefully other lenders in California will join the Governor’s loan relief program and possibly other states will follow suit.

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