A Sea Change in California on the Sub Prime Mortgage Crisis--Democrats and Governor Schwarzenegger Recognize the Problem and Ple

[courtesy of California Progress Report]

Special Session Needed as This Affects All Other Issues the State Faces

By Frank D. Russo

There are a number of signs that 2008 in California may be the "year of the subprime mortgage crisis", as this issue is at least the equal of health care, water, education, or the budget. It is certainly a large part of the budget problems the state faces and is not just between those have been suckered into bad loans or a matter between individual borrowers and lenders. If action is not taken, we will all suffer--and those other dreams that we have as a state will be put aside and we will all suffer. This affects Wall Street and Main Street.

Just as Franklin Delano Roosevelt saved capitalism from the excesses of the 1920's and the Great Depression--this is today's challenge. Action is needed on the federal level, in the states, and even locally as was discussed in Oakland where an urgent call for state legislation was made a month ago.

Governor Schwarzenegger has had multiple press events on this subject and has clearly articulated that this is a major problem that needs state action. He has secured agreements from some lenders in the state and many of those seeking reforms believe that if these lenders will be held accountable on the basis of data on these loans, this will help.

Yesterday, as the Governor appeared in Riverside to announce a public awareness campaign to educate homeowners in trouble of their options, the Speaker of the Assembly, Fabian Nunez and six other key Democratic legislators held a press conference to announce the introduction of 5 major bills and asked the Governor to call a special session of the legislature to speed the consideration and passage of these bills. At the same time, San Francisco Mayor Gavin Newsom held a press conference attended by others seeking action. Today, Los Angeles Mayor Antonio Villaraigosa will be making a major public statement and Member of Congress Maxine Waters is holding hearings in Los Angeles.

Speaker Nunez, Assembly Banking and Finance Committee Chair Ted Lieu, Assembly Judiciary Committee Chair Dave Jones, Assembly Labor and Employment Committee Chair Sandre Swanson, and other Assembly Democrats unveiled an important legislative package that will help minimize the financial crisis caused by the foreclosures.