Assembly Speaker Fabian Nunez and other Democratic Assembly members say legislation is needed to crack down on abusive lending practices. Denise Carruth is approaching foreclosure on her Sacramento-area home fast. She’s had to move into a rental and needs to sell her house soon.
"It’s right now at a 179-thousand with no offers and we paid 313 for it.”
Nunez and Democrats are preparing legislation to address a number of issues in sub-prime lending. Among them—banning pre payment penalties that Nunez says are impacting borrowers.
“Who at the time would like to refinance their homes but cannot refinance their home because they have a huge prepayment penalty…”
The head of the California Association of Mortgage Brokers says abusive lending practices should be addressed—but notes that adjustable rate loans have served some homeowners well.
A spokesman for the Governor did not directly address whether the Governor will call a special session of the legislature on the subject. However, he says Schwarzenegger will talk to the Speaker about what proposals he has in mind.