Foreclosure aid bill signed

OAKLAND — Gov. Arnold Schwarzenegger signed a bill Tuesday designed to help Californians hold onto their homes and to protect communities from the fallout of the state’s foreclosure crisis.

The bill by Senate President Pro Tem Don Perata and Assembly Speaker Karen Bass, both Democrats, requires lenders to give struggling homeowners a 30-day warning before filing a default notice, the first stage of the foreclosure process.

Lenders must also provide homeowners with additional information on the process and explore options to avoid foreclosure.

The measure, SB 1137, gives tenants at least 60 days to move out when a lender forecloses on a rental property. To prevent neighborhood blight, local governments can impose daily fines of $1,000 on lenders that fail to maintain empty homes.

A half-million Californians have subprime loans that will jump to higher rates over the next two years, Schwarzenegger said Tuesday at a signing ceremony in Oakland.

“Those people need help,” he said. “Foreclosure not only devastates families, but it hurts neighborhoods and it depresses our economy and our budget.”

The requirement to contact homeowners only applies to loans made from 2003 through 2007, the primary source of the current wave of foreclosures.

Every week, lenders seize more than 50 homes in Sonoma County from borrowers who have fallen behind on their payments. Lenders took back 1,463 properties in the first six months of 2008, up from 286 during the same period a year ago, according to the county recorder’s office.