Monday, April 16, 2007

The subprime lending market

eric-podium supporters
Originally uploaded by CD-13.
Los Angeles already has a housing crisis. The last thing it needs is another one.

The same day that housing advocates set up an all-day "tent city" to spur action to end homelessness, I joined John Bryant of Operation Hope to call attention to an emerging undertow in the choppy sea of L.A.'s housing trials.

About 65 percent of renters can not afford to pay the median price for an apartment in Los Angeles. About two percent of our city can afford to buy the median-priced home in today’s market.

According to the Los Angeles Business Journal (subscription), in 30 Los Angeles zip codes, risky sub-prime loans account for at least a fifth of all mortgages issued in just the last two years. We don't yet know how hard the sub-prime market's woes will hit Los Angeles, but we need to be prepared and to reach out.

I have introduced a motion that will ask our city staff to evaluate the economic effects of the sub-prime market’s woes on our city, to analyze how broadly and deeply it affects our city, and to report on available options to help out people feeling the heat.

Meanwhile, Operation Hope is already helping people who are facing foreclosure or worried about their payments. They have set up a Mortgage HOPE Crisis Hotline at (888) 388-HOPE to provide free financial counseling to those most in jeopardy of losing their homes. I spoke to an operator who walked me through the questions she would ask a client. Please don't hesitate to ask for help.