Sacramento, CA – Assemblymember Ted W. Lieu, (D-Torrance) has introduced one of the most comprehensive and important pieces of legislation in the country to stem the tide of foreclosures and get our economy back on track. AB 4xxxx, 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 California Foreclosure Prevention Act is designed to force Wall Street to help the citizens of “California Street.” The Act:

1. Imposes a 120 day foreclosure moratorium to allow distressed homeowners time to work out loan modifications with their lenders.

2. Allows 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 may be modified several ways, including interest rate reductions,extension of the loan term, or principal reduction.

3. Provides oversight and accountability by requiring regular reports to the legislature on loan modifications and foreclosure reductions, and coordination with appropriate state regulators.

Not a single dime of taxpayer money will be used to pay for the loan modifications. Rather, Wall Street firms and banks will be the ones that will take the haircut. If enacted into law, this Act would be the first law in the nation to impose a foreclosure moratorium and encourage loan modifications.

An ancient proverb states that “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. It is time we change our direction. It is time we address the root problem of foreclosures.

The California Foreclosure Prevention Act is jointed authored by Assemblymember Ted Lieu, Assemblymember Kevin De León, and Assemblymember Sally Lieber; and co-authored by Assembly Speaker Karen Bass and Assemblymember Cathleen Galgiani. It will be heard in the Assembly Banking & Finance Committee on Monday, November 17, 2008 at 10:00 a.m.

Assemblymember Ted W. Lieu represents the 53rd Assembly District, which includes El Segundo, Hermosa Beach, Manhattan Beach, Redondo Beach, Torrance, Lomita, Marina Del Rey, and portions of the City of Los Angeles.