San Diego City Attorney seeks foreclosure moratorium

Legal News Line Aug. 26, 2008, 8:15pm

Mike Aguirre

SAN DIEGO, Calif. (Legal Newsline)-San Diego City Attorney Mike Aguirre will ask the City Council in an upcoming meeting to declare a "foreclosure crisis," which he believes will help stop the city's rapid rise of foreclosures.

Aguirre told Legal Newsline that he will make his request during the Sept. 9 council meeting.

"According to the latest reports," Aguirre said, "foreclosures in the city are up 213 percent, the highest number in the history of the city."

His office submitted a resolution seeking the crisis designation to the council today, according to staff member Jeff Van Deerlin.

Aguirre's draft resolution states: "The City of San Diego is experiencing a crisis in the real estate market fueled by an unprecedented number of foreclosures in the wake of lending institutions' predatory lending practice and widespread use of sub-prime loans."

If approved, the resolution would urge lending institutions with sub-prime loans involving owner-occupied residences in the city t voluntarily institute a moratorium on foreclosures and evictions of homeowners who meet a specific set of criteria.

Activists from across the state are scheduled to join Aguirre, including state Assemblyman Ted Lieu, Robert Gnaizda, general counsel of The Greenlining Institute, and Faith Bautista, executive director of the San Diego-based Mabuhay Alliance.

Bautista held the first public protest in the Western United States over Countrywide Financial Corp.'s predatory lending practices in 2007, long before several state attorneys general filed suit against the company now owned by Bank of America.

Gnaizda has asked Attorney General Jerry Brown to seek a preliminary injunction against Countrywide that would block all foreclosures until a deal for saving homes could be reached.

Gnaizda said the San Diego City Council meeting will be an important step in crystallizing the problem of foreclosures, exacerbated by Countrywide's lending practices that allegedly rewarded employees for writing riskier, more expensive loans.

Bautista said she the City Council could set a model for other cities in the country to provide a safety net for those on the brink of losing their homes to foreclosure.

"We want to send a message that it can be done here," Bautista told Legal Newsline on Monday. "The City Council has to realize that every half hour another family is losing its home and something needs to be done."

More News