http://www.calpirg.org/newsroom/more-news/more-news http://www.calpirg.org/newsroom/more-news/more-news/main-street-principles-to-guide-the-wall-street-rescue http://www.calpirg.org/newsroom/more-news/more-news/main-street-principles-to-guide-the-wall-street-rescue Thu, 25 Sep 2008 11:38:04 -0500 http://www.calpirg.org/newsroom/more-news/more-news/governors-mortgage-plan-is-one-small-step Governor’s Mortgage Plan is One Small Step Governor Schwarzenegger’s newest plan for the mortgage meltdown is an encouraging sign that he is truly dedicated to getting California out from under the collapsed housing market. He will have the opportunity to add a big step to his hopefully unfinished list of projects if the legislature approves the comprehensive mortgage reform bill currently being debated. If the governor and the legislature want to claim credit for addressing the mortgage crisis they will need to add passing the proposed package to the steps already taken. If we don’t address the lax lending standards that got us here in the first place, the governor 10 years from now could be in the same position the Schwarzenegger administration is in today. It is unfortunate that it took a catastrophe of this magnitude to make lending industry reforms possible. Now is the best opportunity the governor and the legislature will have to prevent the next mortgage crisis before it starts. http://www.calpirg.org/newsroom/more-news/more-news/governors-mortgage-plan-is-one-small-step Tue, 22 Jul 2008 18:56:12 -0500 http://www.calpirg.org/newsroom/more-news/more-news/ag-goes-after-worst-offenders-in-the-mortgage-crisis AG Goes After Worst Offenders in The Mortgage Crisis Statement by Pedro Morillas CALPIRG Legislative Advocate: Attorney General Brown should be applauded for going after the worst of the worst offenders who are responsible for the mortgage meltdown. Unfortunately, even the attorney general doesn’t have the resources to prosecute every bad actor who contributed to the current mess. For every Angelo Mozilo and David Sambol there are a thousand guys you’ll never hear of who are guilty of the exact same deceptions, but on a smaller scale. The Attorney General’s suit will expose the flaws in the current system that allowed people like Mozilo to profit off of so many homeowners. Unless the state and federal government step up and pass new rules to reign in abusive lending practices, we are just going to see more well dressed businessmen doing the perp. walk with no assurance that another meltdown can be avoided. While the Attorney General has a strong case based on Countrywide’s deceptive practices, the reality is that the loan products that led to the crisis were, and still are, perfectly legal. The scale of the mortgage crisis and its effects beyond the lending industry make mortgage lending reforms crucial to protecting new home buyers as well as the economy. ### http://www.calpirg.org/newsroom/more-news/more-news/ag-goes-after-worst-offenders-in-the-mortgage-crisis Wed, 25 Jun 2008 16:44:37 -0500 http://www.calpirg.org/newsroom/more-news/more-news/congress-votes-resoundingly-to-close-tax-loophole-for-private-federal-contractors Revenue from Fair Share http://www.calpirg.org/newsroom/more-news/more-news/congress-votes-resoundingly-to-close-tax-loophole-for-private-federal-contractors Fri, 23 May 2008 11:42:17 -0500 http://www.calpirg.org/newsroom/more-news/more-news/calpirg-recommendations-to-governor-schwarzenegger-for-2008 http://www.calpirg.org/newsroom/more-news/more-news/calpirg-recommendations-to-governor-schwarzenegger-for-2008 Tue, 08 Jan 2008 14:11:24 -0600 http://www.calpirg.org/newsroom/more-news/more-news/california-joins-lawsuit-against-epa-for-restricting-public-access-to-toxic-pollution-information California Attorney General Jerry Brown joined a http://www.calpirg.org/newsroom/more-news/more-news/california-joins-lawsuit-against-epa-for-restricting-public-access-to-toxic-pollution-information Wed, 28 Nov 2007 16:01:45 -0600 http://www.calpirg.org/newsroom/more-news/more-news/calpirg-calls-for-a-tune-up-for-car-buyers-bill-of-rights CALPIRG Calls for a “Tune-up” for Car Buyers Bill of Rights Statement by Pedro Morillas upon the release of a new report by CARS on consumer protections in the used auto market The car buyer’s bill of rights needs a tune up. It has a few miles on it now, and it is clear that it still needs work. Specifically, the two day return policy is not working the way it should. The return policy is intended to give consumers a way out of a bad deal. If they discover that the car they have is not the car they thought they were buying, they have the option to return it. However, car dealers are requiring consumers to spend an additional $75 to $400 upfront for the ability to return the car later. By charging consumers, car dealers are putting up a road block for a whole segment of consumers who would otherwise use the return option. If the car seems fine during a test drive, spending the extra money “just in case” doesn’t seem necessary. Unfortunately, from funny noises to funny smells, sometimes you miss things. As many car buyers know, funny smells are on the low end of the spectrum when it comes to car problems. The way the law stands, if someone doesn’t buy the return option they could be stuck making payments on a car they can’t even drive. At the end of the day, all consumers should have the option to return a car within 72 hours if they find something wrong with it. Car dealers may oppose this policy, but they don’t have much ground to stand on. After all, if a consumer does return a car, they have the ability to charge consumers a restocking fee for their trouble. Dealers can charge a restocking fee to discourage joy riders, but charging a fee for the return option as well is overkill. Kicking the tires shouldn’t cost an arm and a leg. http://www.calpirg.org/newsroom/more-news/more-news/calpirg-calls-for-a-tune-up-for-car-buyers-bill-of-rights Wed, 28 Nov 2007 16:19:15 -0600 http://www.calpirg.org/newsroom/more-news/more-news/governor-should-add-housing-crisis-to-budget-agenda-in-special-session-coalition-urges OAKLAND, Calif.—October 7, 2008—Gov. Schwarzenegger should make mortgage reform a key part of http://www.calpirg.org/newsroom/more-news/more-news/governor-should-add-housing-crisis-to-budget-agenda-in-special-session-coalition-urges Tue, 07 Oct 2008 19:04:03 -0500 http://www.calpirg.org/newsroom/more-news/more-news/calpirg-supports-mortgage-reform-bill CALPIRG APPLAUDS LEGISLATION TO REIN IN SUBPRIME MORTGAGE LENDING INDUSTRY Sacramento, CA— CALPIRG applauds Assemblyman Ted Lieu for introducing “The Subprime Lending Reform Act of 2008.” The statewide public interest group also praised Speaker Núñez and the other 35 representatives in the legislature for co-authoring this important legislation. AB 1830 is a significant step towards ensuring California’s consumers are protected from unsound lending practices in the future. “Lenders have been rolling the dice with people’s futures, and their luck finally ran out,” said Pedro Morillas CALPIRG Legislative Advocate. “With 500,000 foreclosures, and the state $14.5 billion in the hole, everyone is going to end up paying the price for the lending industry’s gamble. The question at hand is how to prevent the next mortgage crisis.” Lenders have been able to temper the chance they take in issuing subprime loans by combining them with less risky investments on the stock market. Borrowers don’t have the luxury of that safety net. AB 1830 will require lenders to act in the best financial interest of the borrower by banning certain abusive practices such as: - Yield Spread Premiums: Kickbacks to brokers from lenders for placing a borrower in a higher interest loan than they qualified for. 20-40 percent of borrowers with subprime loans appear to have statistics consistent with prime loan borrowers, meaning they could have gotten a better deal on their mortgage. - Prepayment Penalties: Fees imposed by lenders on borrowers for paying off a loan early. 80 percent… - Negative Amortization Loans: Loans with payments that are less than the interest, which leads to a premium that keeps increasing every month. AB 1830 will also require lenders to verify that a borrower can reasonably take on the loan they are choosing by requiring lenders to: - Base someone’s ability to repay on the full amount of the loan, not just the initial interest rate. - Verify a borrower’s income. Stated income loans accounted for 50 percent of all 2006 California loans. “There are much deeper causes to the mortgage meltdown than a few over-eager borrowers who got in over their heads,” concluded Morillas. “The Subprime Lending Reform Act of 2008 will rein in the unsound business practices of the mortgage lending industry that have, until now, gone unchecked. Clearly, better regulations must be placed on an industry that has the power to affect the economy on a global scale.” -30- http://www.calpirg.org/newsroom/more-news/more-news/calpirg-supports-mortgage-reform-bill Wed, 23 Jan 2008 14:09:09 -0600 http://www.calpirg.org/newsroom/more-news/more-news/legislature-shows-commitment-to-significant-mortgage-reform-schwarzeneggers-turn-to-step-up For Immediate Release: 8/27/08 Contact: Pedro Morillas (916) 448-4516 x 112 (805) 234-5612 (cell) Legislature Shows Commitment to Significant Mortgage Reform, Schwarzenegger’s Turn to Step Up http://www.calpirg.org/newsroom/more-news/more-news/legislature-shows-commitment-to-significant-mortgage-reform-schwarzeneggers-turn-to-step-up Wed, 27 Aug 2008 18:22:36 -0500 http://www.calpirg.org/newsroom/more-news/more-news/machado-senate-banking-gut-crucial-mortgage-reform Machado, Senate Banking gut crucial mortgage reform Senators ignore plight of their own districts Californians must wait another year for needed protections OAKLAND—June 18, 2008— The California Senate Banking Committee bowed to industry today, killing all but one of the Assembly Democrats' crucial bills designed to rein in abuses prominent in the subprime market and thereby eliminating the prospect of restoring responsibility and accountability to the mortgage market in California this year. One bill, AB 1830 (Lieu, D-Torrance), was left standing, but had been stripped of key provisions at the urging of Chairman Machado and was reduced to a bill that merely authorized CA regulators to enforce weak federal regulations. “California's economy, current borrowers and future borrowers all lost today,” said Paul Leonard, director of the California office of the Center for Responsible Lending (CRL). “The Assembly handed the committee a solid package of bills that would have done much to safeguard Californians from another mortgage crisis, but the committee chose to preserve the status quo, and keep the rules that brought us the unmitigated foreclosure and credit crisis we are in today.” CRL, along with a coalition of partners including ACORN, CALPIRG, the California Labor Federation, the California Reinvestment Coalition and Consumers Union, has pushed for reforms that would have provided strong protections to borrowers and returned the mortgage market to basic principles of responsible lending. “California needs its legislature to pass common sense regulation of unfair lending practices,” said Kevin Stein, associate director of the California Reinvestment Coalition. “But today the Senate Banking Committee weakened and killed mortgage legislation, failed to prevent a foreclosure crisis from happening again in the future, and did nothing to help families who are currently struggling to make it.” Members of the Senate Banking Committee, which includes representatives of some of California's hardest-hit housing markets, rejected a number of bills that would have limited prepayment penalties; required lenders to evaluate a borrower's ability to repay; established mortgage brokers' fiduciary duty to borrowers; regulated mortgage servicers; required lenders to provide translated summary of loan terms to non-English speaking borrowers and prohibited involuntary waivers of legal protections. “It's baffling that even after 500,000 foreclosures in California, industry continues to defend the same lax lending rules that got us into this mess in the first place,” said Pedro Morillas, legislative advocate for CalPIRG. “Industry came out on top today, but we'll continue fighting for reforms to prevent another mortgage meltdown from happening ever again.” Interestingly, committee Chairman Mike Machado (D-Linden) and Vice Chairman George C. Runner (R-Antelope Valley) have the dubious distinctions of representing Central Valley and Inland Empire regions that have borne the brunt of the foreclosure storm. According to ForeclosureRadar.com, from October 2007 to March 2008, Machado's district, which includes Stockton, Vallejo and Fairfield, had more than 10,000 Notices of Default (NOD) and foreclosures; Runner's district, which includes parts of San Bernardino and Ventura counties, had more than 13,000 NODs and foreclosures. “Knowing what we know now, maintaining the status quo is not an option,” said Norma Garcia, senior attorney at FOR IMMEDIATE RELEASE CONTACT: GINNA GREEN 510.379.5513 Consumers Union. “And to allow it to continue would not only be negligent, it would be a travesty.” ### About ACORN, California Reinvestment Coalition, CalPIRG, Center for Responsible Lending and Consumers Union ACORN, the Association of Community Organizations for Reform Now, is the nation's largest community organization of low- and moderate-income families, working together for social justice and stronger communities. The California Reinvestment Coalition advocates for the right of low-income communities and communities of color to have fair and equal access to banking and other financial services. CALPIRG takes on powerful interests on behalf of Californians, working to win concrete results for our health and our well-being. The Center for Responsible Lending is a research and advocacy organization dedicated to ending abusive financial practices. Consumers Union, the nonprofit publisher of Consumer Reports, works for a fair, just and safe marketplace for all consumers. http://www.calpirg.org/newsroom/more-news/more-news/machado-senate-banking-gut-crucial-mortgage-reform Thu, 19 Jun 2008 16:44:03 -0500 http://www.calpirg.org/newsroom/more-news/more-news/retailers-misleading-consumers-on-the-digital-television-dtv-transition http://www.calpirg.org/newsroom/more-news/more-news/retailers-misleading-consumers-on-the-digital-television-dtv-transition Wed, 13 Feb 2008 11:39:52 -0600