Sen. Murray hosts foreclosure discussion

Legislation to combat “predatory lending” and to encourage “financial literacy” is needed to address a national foreclosure crisis in the wake of the subprime loan meltdown, U.S. Sen. Patty Murray said Monday.

“We are not doing enough to help educate people about the complexities of buying a home or the help they can get if they find themselves in trouble, whether it’s a health care crisis or a divorce or a loss of job and they get in a position where they can’t afford to pay their mortgage,” said Murray. “There’s help out there, but if they sit at home and don’t ask for it, they get to a point where it’s too late.”

Local lenders, regional housing counselors and women affected by mortgage woes offered feedback to Murray during the roundtable at the West Central Community Center, one of several Murray has hosted across the state.

Peggy Burrell, a housing counselor with Spokane Neighborhood Action Programs , said job or income loss and health problems are the primary causes for people defaulting on mortgages among borrowers her organization helps.

“Early intervention is something we probably really need to take a hard look at,” Burrell said.

She decried Web sites such as You Walk Away , which offered services to allow mortgage holders to simply “walk away.” (The site appears to be offline today. Read about why it raised red flags for some experts here .)

In other foreclosure news today, The Associated Press reports that the former president of Countrywide Financial Corp, Stanford Kurland, “will serve as chairman and chief executive officer of a new company unveiled Monday that will acquire and restructure distressed mortgages”:

“Private National Mortgage Acceptance Co. LLC, also known as PennyMac, intends to help borrowers restructure loans so they can avoid foreclosure and maintain payments.” (Full story here )

Look for more in Tuesday’s paper.