State Assemblyman Ted Lieu has introduced what he describes as one of the most comprehensive and important pieces of legislation in the country to stem the tide of foreclosures and get the economy back on track.
The California Foreclosure Prevention Act imposes a 120-day foreclosure moratorium unless a lender offers a comprehensive loan modification program designed to keep people in their homes.
The assemblyman, whose district includes the Argonaut readership area south of Santa Monica, says the act is designed to force Wall Street to help the citizens of “California Street.”
The act would:
— impose a 120-day foreclosure moratorium to allow distressed homeowners time to work out loan modifications with their lenders;
— allow lenders to avoid the moratorium if they have a comprehensive loan modification program based, in part, on criteria set forth by the Federal Deposit Insurance Corporation; loans could be modified several ways, including interest rate reductions, extension of the loan term, or principal reduction; and
— provide oversight and accountability by requiring regular reports to the legislature on loan modifications and foreclosure reductions, and coordination with appropriate state regulators.
If enacted into law, this bill will be the first law in the nation to impose a foreclosure moratorium and encourage loan modifications, according to a Lieu spokesman
Lieu cites an ancient proverb, “If we don’t change the direction we are going, we will end up where we are headed.”
“We have seen the results of uncontrolled foreclosures: a financial meltdown of historic proportions,” said Lieu. “It is time we change our direction.
“It is time we address the root problem of foreclosures.”