Leonard, Paul

The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices.

Who Pays the Price for Bailed-Out Bank Mistakes? Homeowners!

By Paul Leonard
Center for Responsible Lending

Across California, homeowners like Patricia and Manuel Mondoy of Hayward sit in loan modification limbo.

Bailed out banks and other mortgage servicers have signed on to federal programs agreeing to provide sustainable loan modifications to troubled, qualified borrowers in return for incentive payments. Other servicers have their own programs to provide loan modifications to borrowers where the modification would be a win-win for the borrowers and the owners of the mortgage.

Despite these promises and programs, the Mondoys—and thousands of other homeowners across the state—are at risk of losing homes to foreclosure because their mortgage servicers started the foreclosure clock before confirming whether or not the homeowners were even eligible for a modification.

Mortgage Bankers Association Report: The Foreclosures Continue in California and the Nation

Paul-Leonard-Testifying.jpgBy Paul Leonard
California Office Director
Center for Responsible Lending

Nearly 11 percent of all mortgage loans in California were past due or in foreclosure at the end of September according to new data released this morning from the Mortgage Bankers Association (MBA).

The data, which show that nationally one in 10 homes were delinquent; 1 in 20 were seriously delinquent and 1 in 33 were in foreclosure as of Sept. 30, underscore the need for swift and effective solutions to mitigate the foreclosures that are at the root of the worst economic crisis in decades and the personal financial crises of millions of homeowners and their neighbors.

Solutions to date offered by industry and the Bush administration have not been ambitious enough. Nor has California done enough to stem the rising tide foreclosures.