Los Angeles and Southern California foreclosures courtesy of the Los Angeles Times. |
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With rising foreclosure rates in many areas in California, mortgage bailouts and loan restructuring are among the options being considered to help avoid a so-called mortgage crisis. Lenders say that there's plenty of money out there for new loans, purchases or otherwise, but it's much harder to access than before. Among the proposals on the table is $10-billion fund to help people restructure their high-interest-rate loans into more manageable mortgages. One group, California ACORN, wants an immediate freeze of foreclosures by banks and other lenders for as long as a year and passage of a state law prohibiting sheriffs from auctioning foreclosed property for at least six months. Sen. Michael Machado (D-Linden), chairman of the Senate Banking, Finance and Insurance Committee has proposed two bills related to these foreclosure issues that are apparently expected to pass before the September 14 recess. Machado wants state regulators to be more aggressive in cracking down on real estate brokers and lenders who may be knowingly putting people into homes that they can't afford. His proposed bills are as follows: - Put federal loan-affordability guidelines into state law.
- Boost the number of state examiners responding to consumer complaints of unethical lending practices.
The current crisis is largely blamed on predatory lending practices (or shady lenders), and the state of California is looking for ways to prevent this from happening in the future as well as saving as many homeowners as possible from foreclosure. Gov. Schwarzenegger's administration is said to be taking steps to help potential home buyers. The heads of various California consumer agency departments are apparently putting the finishing touches on regulations that would tighten lending practices. Some assistance programs are already in place to help homeowners restructure their loans so they're more affordable. Washington Mutual's senior vice president Michaela Albon says that her company has earmarked $2 billion and hundreds of employees for a program to contact mortgage holders and restructure loans as much as six months before their interest rates were set to increase. Other lenders are slower to contact homeowners who seem to be in trouble, often waiting until after the foreclosure process starts. The Los Angeles Times has produced an interactive heat map of foreclosures in Southern California as of the second quarter of 2007. While there are no surprises here, and really no changes in previously reported 2nd quarter foreclosure numbers, it is a great way to get a visual representation on the troubled areas in California. High on the troubled list are Palmdale and Lancaster in the Los Angeles County area. Most other areas, including those in Santa Clarita, show 20 or fewer foreclosures per zip code. | 
