Consumers groups say California response to foreclosure crisis is weak
action on the part of the Legislature to deal with the subprime
mortgage meltdown.
"In the short term, we would like to see the state of California invest
some resources in making sure that borrowers have access to housing
counselors and legal service providers who can help them evaluate their
loans and determine what their options are going forward," says Paul
Leonard, California state director for the Center for Responsible
Lending.
(Mr. Leonard expands on CRL’s ideas in today’s CVBT Audio
Interview. Please click on the link at the end of this story to listen
or to download the audio file to your MP3 player or computer.)
California is projected to see nearly half a million foreclosures among
subprime loans originated between 1998-2006 yet the state’s lawmakers
have taken no action to address the mortgage collapse, the consumer
groups say.
They blame "irresponsible lending practices" as the root cause of the current mortgage meltdown.
According to CRL, Ohio, Maine, Minnesota and North Carolina have
implemented "strong legislation" to curb the risky practices that
permeate the subprime market. Numerous states are exploring ways to
help borrowers facing foreclosure, including Colorado, New York,
Massachusetts and Ohio, which have all created funding pools to help
borrowers refinance into long-term affordable mortgages, CRL says.
"With record levels of foreclosures and more coming, California’s
homeowners, housing markets and economic growth are all at risk," says
Mr. Leonard.
The organizations, including California ACORN, the California Reinvestment Coalition, the Center for Responsible Lending, Consumer Federation of California
and Consumers Union today recommended a number of policy changes that
would both assist current borrowers in crisis and protect future
subprime borrowers.
Click here to listen to an interview with Paul Leonard,
Director, Center for Responsible Lending’s California office, by the
Central Valley Business Times on the coalition’s recommendations to the
Legislature.