LOS ANGELES, Calif. /California Newswire/ — They climbed onto busses around midnight and rode 9 hours to Sacramento from Los Angeles. More than 50 homeowners and their families, who had already lost their homes in foreclosure, were in foreclosure or had received Notices of Default. They wanted to meet with the Chair of the Assembly Banking and Finance Committee, Assemblymember Pedro Nava (D-Santa Barbara).
They shared the common experience of being unable to get anyone from the banks to listen. Nava made arrangements for all of them to gather in a Capitol hearing room and listened.
Their stories, mostly in Spanish and spoken through tears, made an impact on Nava. “I was deeply moved by their stories of hardship and have asked the California Department of Corporations to look into their claims,” said Nava. “Many families will be left homeless unless something is done.”
Nava recently introduced Assembly Bill 1588 to establish a mediated mortgage workout program to help homeowners and lenders reach sustainable loan modifications. Banks and borrowers will be required to sit across a table from each other under the supervision of a mediator and work toward an agreement.
Under AB 1588, if attempts at loan modification fail, a reasonable transition plan would be established by the borrower and lender. Nava said “This type of mediation program has proven successful in other states. I don’t know why it wouldn’t work here.”
California has the fourth highest foreclosure rate in the nation, with one in every 144 homes in some stage of the foreclosure process. While these numbers have decreased from last year, 632,573 California properties received a foreclosure filing in 2009. Thus far, federal and state efforts to encourage banks and servicers to modify borrowers’ loans have largely been on a voluntary basis, and those who need help are subsequently falling through the cracks. California needs a new direction and the implementation of a loan mediaton program may be one of the solutions.
“This crisis continues to devastate thousands of California families and communities. It’s time to take a new approach to help families remain in their homes. My meeting with these homeowners is further evidence that our existing loan modification programs have been ineffective and the number of families benefiting from them is minimal,” said Assemblymember Nava.
Letter below to California Department of Corporations:
February 16, 2010
Preston DuFauchard, Commissioner
Department of Corporations
1515 K Street, Suite 200
Sacramento, CA 95814
Dear Commissioner DuFauchard:
As Chair of the Assembly Banking and Finance Committee, I recently met with over 50 homeowners who have lost or are in the process of losing their homes. Most of these homeowners have potentially been a victim of fraudulent loans or loan modifications.
I asked them to voluntarily fill out the attached form which provides us with the necessary information to get to the bottom of their crises. As you will see from their concerns, these homeowners have no where else to turn and want to stay in their homes. I respectfully request that you file these forms as Department of Corporations’ complaints and review and respond to these homeowners.
Thank you in advance for your help with these matters. Please do not hesitate to contact me at 916-319-3081.
Chair, Assembly Banking and Finance Committee
Assemblymember, 35th District.