Nearly 700,000 Face Foreclosure as Banks Step Up Resistance to Legislative Relief

Thursday, June 28, 2012

While bankers, the Chamber of Commerce and the securities industry take their last shot at derailing state legislation to provide  foreclosure-prevention relief to beleaguered homeowners, a new report shows nearly 700,000 Californians are at least 30 days delinquent on their mortgage payments.

And it’s all transpiring under the specter of the city of Stockton’s impending bankruptcy, announced Tuesday, which was directly linked to a housing crisis triggered by the nation’s economic collapse.

The report from the Center for Responsible Lending, a nonprofit Washington-based think tank, says 180,000 of homeowners on the brink live in Los Angeles County, 163,000 are in the Inland Empire and 100,000 are in the Bay Area. Nearly a third of those who are delinquent, 211,822, are already in the foreclosure process and 38% are 90 days delinquent.   

Legislators will have a chance to mull over the numbers as they prepare to vote next week on a bill that would protect homeowners in two ways. The legislation would ban dual-tracking of homeowners, a process whereby an institution that is processing an applying for loan modification pursues foreclosure at the same time. The bill would also give owner-occupiers who are first-mortgage holders the right to sue a financial institution if the lenders have intentionally or recklessly broken the law.

The bill emerged from a conference committee of senators and Assembly members and heads back to their respective chambers for approval. A vote could come as early as Monday. The legislation is part of a Homeowner Bill of Rights sponsored by state Attorney General Kamala D. Harris.

Governor Jerry Brown has not indicated a position on the legislation, but financial institutions have. They oppose it because they say its complexity and ambiguity will likely spur a plethora of unnecessary lawsuits.

–Ken Broder


To Learn More:

Risk of Foreclosure Looms over 700,000 Californians (by Aaron Glantz, The Bay Citizen)

California Foreclosures (Center for Responsible Lending) (pdf)

California Foreclosure-Prevention Measure Nears Final Passage (by Marc Lifsher, Los Angeles Times)

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