CA Governor Wants Foreclosure Moratorium

California Governor Arnold Schwarzenegger has proposed a 90-day moratorium on owner-occupied homes where a 'notice of default' has been filed. The moratorium is part of a larger relief package for the ailing California housing market, the largest in the nation in terms of loans outstanding at roughly $1.8 trillion, or 19% of the national market, according to figures compiled by the Quarterly Data Report. The governor wants his proposals considered during a special session of the legislature he will call to deal with the state's budget crisis. Even if the moratorium becomes law, lenders can gain an exemption if they can demonstrate to state officials they have "an aggressive" loan modification program in place, according to a statement released by the governor's office. However, the loan modification model is based on a maximum housing debt-to-income ratio of 38%. The model outlined by the state aims to reduce monthly mortgage payments by 25% to 30%.