Last week, Governor Schwarzenegger told the US Treasury Secretary that California might need $7 billion in federal money just to pay bills. Now it appears the state budget—after those months of wrangling—may have to be opened up again. Also, if you’re behind on your mortgage payments, Countrywide may have a deal for you. Image Credit: U.S. Home Prices drop to October 2005 Levels. By David McNew/ Getty Images News
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Bank of America—the new owner of Countrywide—wants to get out from under charges of lending abuse. It's told California and other states that it will help mortgage holders struggling to make their payments—to the tune of $8.7 billion for 400,000 borrowers. About 125,000 of those people are in California. The deal was negotiated by California Attorney General Jerry Brown.
Scott Reckard, Business writer for the Los Angeles Times
Governor Schwarzenegger and the state legislature may have to re-open the budget, passed grudgingly after Republicans and Democrats deadlocked for 85 days past the date it was due. In the meantime, California schools, law enforcement and local governments may be at risk unless the state gets a $7 billion loan from Washington soon.