[courtesy of California Progress Report]

By J. Mijin Cha
Policy Specialist
Progressive States Network

Not surprisingly, the Bush Administration's proposal for fixing the subprime lending crisis is an industry-led deal that involves completely voluntary actions to fix the current crisis and will ultimately help only a few of the millions of people who have either lost or are in danger of losing their homes. With absolute failure at the federal level, it is again up to states to step in. In two recent editorial pieces, the executive directors of the Progressive States Network and the Drum Major Institute called on New York Governor Spitzer to impose a six-month moratorium on foreclosures to stop the rapidly increasing rate of home loss, a policy all governors should enact. A moratorium would give lenders incentive to restructure loans on fair terms and fight back against the Wall-street backed predatory lenders.

[courtesy of California Progress Report]

By Michele Magar

Nearly 500,000 California homeowners will face foreclosure due to predatory mortgage lending in the subprime mortgage market. Many more Californians will be affected, as entire families are rendered homeless and neighborhoods become devastated by concentrations of foreclosed and abandoned properties.

The California legislature is doing little to stop this disaster, but plaintiffs' attorneys can help. Federal and state laws which offer statutory attorneys’ fees enable attorneys to help desperate homeowners restructure abusive loans into sustainable ones, rescind predatory mortgages altogether, and battle foreclosure rescue scams. Homeowners will have to rely on consumer attorneys in small firms because big firms often represent lenders.

The subprime mortgage crisis