Congresswoman Jackie Speier

Blunt warnings to housing industry from Congressional hearing

Central Valley Business Times

STOCKTON - Four members of Congress saw from bus windows Saturday the face of foreclosure in the Central Valley.

The tour of abandoned, boarded up homes preceded a congressional hearing on the foreclosure crisis where a powerful member of Congress warned the mortgage industry to listen to lawmakers now, lest stricter controls are imposed.

“Foreclosures are the single biggest cause of economic problems we are in,” said Barry Frank, D-Mass., chairman of the House of Representatives’ Committee on Financial services.

And then he sent a warning to the lending industry not to hide behind the law and fail to do all possible to ease the problem.

“If people in the lending industry want to avoid some very severe, much more restrictive legislation, it would be in their interest to cooperate with us,” Mr. Frank said.

San Francisco Bay Area congresswoman Jackie Speier went further.

“Those who have violated the law … need to be held accountable,” says Ms. Speier. “We should encourage local DAs … to act. No one has been held accountable.”

U.S. Reps. Jerry McNerney, D-Pleasanton, and Dennis Cardoza, D-Merced, led their fellow members and others on a 20-minute bus tour of the area around Stockton’s downtown arena, where the House of Representatives’ Committee on Financial Services held a hearing on the foreclosure crisis.

On the tour, in addition to federal housing officials and representatives of banks were U.S. Rep. Jackie Speier, D-San Mateo, and the committee chairman, U.S. Rep. Barney Frank, D-Mass.

Mr. McNerney pointed out home after home that was in foreclosure. The tour was given a map with 279 properties in some level of foreclosure within walking distance of the arena.

“The crisis is here. It’s real,” says Mr. McNerney.

“You can see the devastation inside the community,” says Mr. Cardoza. “You can see the devastation in the families.”

Mr. Cardoza says 25 percent of his district has been, is now or will be in foreclosure. “We have some devastating consequences,” he says.

There have been more 12,000 foreclosures in San Joaquin County since January 2007 and “there’s no relief in sight,” says Steve Guiterrez, who has been a county supervisor for 12 years.

Mr. Guiterrez says federal legislation designed to help ease the problem does not go far enough. He says the money it provides will be quickly drained leaving millions without help.

“This is truly another perfect storm. I don’t know how much more the County of San Joaquin and the citizens of the County of San Joaquin can take,” Mr. Guiterrez says.

Foreclosure nightmares are not confined to Stockton. Merced Mayor Ellie Wooten detailed the statistics for the hearing.

There have been 2,185 foreclosures in Merced County so far this year, equal to one home out of every 20, Ms. Wooten says.

It will just get worse, she says.

Fifteen percent of Merced County mortgages are now delinquent by 90 days or more, she says.

One out of 12 property owners unable to pay property taxes, she says.

“The foreclosure crisis is the ‘Katrina’ of California,” Mr. Cardoza says.

By the end of this year, the Central Valley will see 14,000 homes foreclosed, says George Duarte, speaking on behlf of the California Association of Mortgage Brokers.

The committee said it would take written testimony through next week.

It can be sent to any of Mr. Cardoza’s offices:

• 2222 M Street, Ste. 305, Merced 95340

• 1010 10th Street, Ste. 5800, Modesto 95354

• 137 E. Weber Ave., Stockton 95202

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