Both plans would allow distressed homeowners, including thousands in Glendale and Burbank, more time to work out loan modifications with lenders. But some have criticized the proposals for failing to address the root of the problem.
Richard Pittman, housing services coordinator at ByDesign Financial Solutions, a nonprofit housing counseling agency, said the proposals could have negative consequences by simply extending the foreclosure process for homeowners who failed to do enough to stay in their homes.
“In some cases it will buy them time for folks who may be out of work to get them started, and that’s great,” he said. “But people are not necessarily looking at the big picture, and neither is the lender.”
According to a report on Foreclosure.com, 1,614 homes in Glendale and 1,337 in Burbank are in various states of foreclosure.
More than 309,000 homes in California are close to or are already in the process of being foreclosed upon, according to the website, which tracks data nationwide.
The enormity of the situation, aided by a sickly economy and tightening credit market, compelled the Legislature to convene a special session Nov. 5, before the new class of lawmakers is due to be sworn in Saturday.
“We need to have some flexibility and relief to people who are facing imminent foreclosure,” said Assemblyman Paul Krekorian, a Democrat whose district includes Burbank and Glendale. “What I’m going to be concerned about is encouraging lenders who have programs in place without discouraging additional credit from coming onto the market.”
Assembly Speaker Karen Bass tapped Krekorian to serve on the special session’s Banking and Finance Committee, where the proposal will first be debated before the General Assembly is set to chime in.
