The California Home Foreclosure Crisis Needs Action in 2008

[courtesy of California Progress Report]

By Don Perata
President pro Tem
California State Senate

The United States is facing an unprecedented crisis in home foreclosures. This impacts not only the ability of working families to stay in their homes but also the economy at large.

Thousands of Californians are at serious risk in 2008 of losing their homes because they cannot afford to pay their higher monthly mortgage payments under their adjustable mortgages and they cannot obtain refinancing in today's market of tight credit and declining home values caused by the massive numbers of foreclosures that have already occurred.

Individuals and families who are forced from their homes are not the only parties hurt in this crisis. Neighborhoods are left with blight and crime; local governments are hurt by a reduction in the tax base; and investors are left with portfolios containing foreclosed properties worth far less than their investments. Many well-qualified borrowers are unable to obtain mortgage loans, because the economy that would have otherwise supported those loans has dried up.

We must take immediate action to protect and aid these families and our state’s economy. This week, I announced a legislative proposal to address this issue which includes: providing information to consumers regarding the changed payment amount due after reset, increased steps that lenders must take in the foreclosure process, additional notice and rights to tenants living in foreclosed homes and requirements for deed holders to maintain properties that are empty due to foreclosure. We plan to act as quickly as possible, so these protections can become law within a few months.

Joined by many homeowners’ and consumer advocate groups, I will work to address this urgent issue. I have also sent a letter to President Bush and Treasury Secretary Paulson asking them to step up federal efforts and work with the state to tackle this problem. At this time, as we think about gathering with our loved ones in our homes to celebrate the holidays, let’s ensure that all Californians can enjoy the same for many years to come.

For more information, visit the Senate Majority Caucus California webpage.