California Governor Arnold Schwarzenegger has announced a massive program to address a number of aspects of the housing slump in the state which has probably been harder hit by its effects than any other.

The various initiatives will use a variety of state and federal funds including a $5.6 million federal grant to retrain mortgage and banking industry workers laid off as a result of the subprime crisis.

The training monies will come from a U.S. Department of Labor National Emergency Grant; funds which the Department Secretary can parcel out when events create a sudden need for unemployed worker assistance that is beyond a state's capacity to handle.

The California mortgage lending industry has seen more than 8,400 layoffs since last July. Dislocated employees include mortgage bankers, clerical, and administrative staff.

The length and type of training provided will very depending on the skill level of each individual and will include information on the availability of unemployment insurance benefits and other employment services.

The Governor said "We applied for this grant because we want to help displaced workers transition to new jobs and the money will go to the counties with the greatest need. We are not just sitting by and waiting for the economy to pick back up. We are taking all the action we can to keep people working and rebuilding California."

Yesterday Schwarzenegger also awarded $73 million for 40 housing projects in 26 California cities which will be used to help 1,611 California families rent or purchase affordable housing

In the last few weeks the state has undertaken other projects to attempt to blunt the impact of the housing slump. Among them:

  • $69.5 million in permanent low-interest loans from Proposition 1C housing bonds to jumpstart 14 affordable multi-family projects up and down the state.
  • $72 million in federal HOME Investment Partnerships Program funds to provide assistance to first-time homebuyers, reduce the number of bank owned homes and increase the number of rental properties.

  • Joined with OneCalifornia Foundation to announce a bridge loan fund for homeowners facing foreclosure in Oakland.

  • Launched a $1.2 million public awareness campaign to help educate homeowners about options that can help them avoid losing their homes to foreclosures.
  • Announced an agreement with major loan servicers to streamline the loan modification process for subprime borrowers living in their homes.
  • Enacted legislation to increase protections for Californians who own or plan to purchase homes and to expand affordable housing opportunities.