Lt. Gov. Gavin Newsom: Local Governments Should Have Freedom to Explore Options to Address Mortgage Crisis


Today California Lieutenant Governor Gavin Newsom calls on the Securities Industry and Financial Markets Association (SIFMA) to cease making threats to the local officials of San Bernardino County.

SIFMA has attacked the idea of local governments using existing law to help families remain in their homes and keep their communities viable.

"Communities have been ravaged by the housing crisis and the financial sector has had long enough to fix the problem they helped create," Newsom said. "We cannot let another day go by while families are forced from their homes. We must think big and help our local governments develop solutions - because the industry and federal government have not."

"This may be an aggressive idea, but communities such as San Bernardino, Chicago and others have no choice in these desperate times," Newsom continued. "We cannot allow Wall Street, who exploited the housing market for financial gain, to kill an idea before it is given a fair hearing."

"The true injustice of the last few years is that as banks were bailed out and government claimed it has done all it can, the homeowner, the backbone of our communities, has received nothing but eviction notices," said Newsom. "We need to help the people that government bailout programs have left behind - ordinary folks that have worked hard to keep their homes even as values plummeted."

"The economic power that would be unleashed if consumers are untethered from the anchor of these underwater mortgages would result in a return of consumer confidence, economic grow and job creation."

San Bernardino County Chief Executive Officer Greg Devereaux, joined by the cities of Ontario and Fontana, have set up a JointPowers Authority (JPA) to explore options to keep people in their homes before they are in foreclosure.

"I applaud the leaders in San Bernardino for thinking and acting big to protect their communities," said Newsom. "Greg Devereaux' communities are some of the hardest hit in the country and his leadership on this issue should be rewarded with support not the threats of a Washington, DC interest groups that are protecting Wall Street."

"The Washington, DC special interest groups needs to back off," said Newsom. "We owe it to homeowners everywhere to see if the solutions being discussed in San Bernardino will work."