CRL Raps CA for Failing to Stem Foreclosures

Citing a survey showing that mortgage loans entering foreclosure have reached a 25-year high in California, the Center for Responsible Lending is taking California lawmakers to task for not responding to the subprime mortgage crisis.The Oakland, Calif.-based CRL pointed to the Mortgage Bankers Association's recently released delinquency survey for the second quarter, which indicated that the national delinquency rate for single-family home loans jumped to 5.12% in the second quarter and the number of loans entering foreclosure reached a record high. The MBA "failed to acknowledge the risky products and deterioration of lending practices in their own industry," the CRL said, criticizing brokers and lenders for promoting "risky products that maximized their profits" while "los[ing] sight of the basic fundamentals of lending." Unlike other states, California "has not acted to stem the foreclosures or tighten safeguards for borrowers," the organization said. The CRL said the state should provide emergency funding for housing counselors, bar prepayment penalties in subprime loans, and set lending standards that qualify borrowers based on the fully indexed interest rate and verified income. The group can be found online at http://responsiblelending.org.