(SACRAMENTO) – Assemblymember Ted W. Lieu (D-Torrance) today announced Governor Schwarzenegger signed ABx2 7 (Lieu), one of the most comprehensive and important pieces of legislation in the country to stem the tide of foreclosures and get our economy back on track. The California Foreclosure Prevention Act will now impose a 90 day foreclosure moratorium unless a lender offers a comprehensive loan modification program designed to keep people in their homes.

“California’s unprecedented number of foreclosures has crippled our economy,” said Assemblymember Ted Lieu. “This law will help people stay in their homes by adding another incentive for lenders to modify their loan.”

“More foreclosures hurt everyone, not just the struggling families losing their homes,” Assembly Speaker Karen Bass said. “This bill will be an effective tool in helping stem foreclosures and avoiding the lost property values and neighborhood blight that accompany them.”

The California Foreclosure Prevention Act is designed to force Wall Street to help the citizens of “Main Street.” The Act:

1. Imposes a 90 day foreclosure moratorium to allow distressed homeowners time to work out loan modifications with their lenders.

2. Allows lenders to avoid the moratorium if they have a comprehensive loan modification program based, in part, on criteria set forth by the Federal Deposit Insurance Corporation. Loans may be modified several ways, including interest rate reductions, extension of the loan term, or principal reduction.

3. Provides oversight and accountability by requiring regular reports to the legislature on loan modifications and foreclosure reductions, and coordination with appropriate state regulators.

The California Foreclosure Prevention Act is the first law in the nation to impose a foreclosure moratorium and encourage quality loan modifications.

Assemblymember Ted W. Lieu is Chair of the California Assembly Rules Committee and represents the 53rd Assembly District, which includes El Segundo, Hermosa Beach, Manhattan Beach, Redondo Beach, Torrance, Lomita, Marina Del Rey, and portions of the City of Los Angeles.