Los Angeles, CA – The State Assembly Banking and Finance Committee, chaired by Assemblymember Ted Lieu, today joined Operation HOPE at an informational hearing regarding the subprime mortgage crisis that has gripped the nation’s housing market and threatened the very fabric of our economy. At the hearing, the Committee heard testimony from lenders, regulators, and community groups that have stepped in to help those at risk of foreclosure.
Across the nation, almost every local housing market has been battered by a rash of foreclosures, as consumers who used subprime, no-documentation, and/or adjustable rate mortgages are finding themselves in over their heads and unable to stay in their homes.
The State of California, due to its high cost housing, has been the hardest hit of any state. “Many people who achieved the American Dream of owning their own home are now seeing that dream become a nightmare,” Lieu said. “This is a crisis of breathtaking proportions. I called this hearing today to better understand the problem and to discuss with stakeholders how we’re going to start fixing it.”
John Hope Bryant, the founder of Operation HOPE and author of the best-seller “Banking on the Future,” joined the committee today to discuss the role that his organization is playing in trying to help homeowners stay in their homes, and how they are attempting to educate consumers to make better choices. “The root of this crisis is that too many people, poor and middle class alike, asked the wrong question; ‘what’s the payment’ versus ‘what’s the interest rate,’” said Bryant. “This sub-prime mortgage crisis in America is ground zero for making the case around financial illiteracy, and thereafter for making the case for action around financial literacy empowerment, for youth and adults alike.”
At the hearing, the Committee took testimony from community groups, noted economists, and government regulators who oversee the mortgage industry. One panel also featured a response from representatives of the industry, who spoke of the steps they are taking to reach “workout” agreements with their mortgagees.
The State Assembly Banking and Finance Committee has primary jurisdiction over all aspects of banking, lending, and the securities market.