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L.A. mayor proposes foreclosure plan

June 12, 2009 12:00:00 AM PDT
L.A. Mayor Antonio Villaraigosa has come up with a plan to stem the rising tide of foreclosures in Los Angeles.He will ask the state Legislature to require mandatory mediation between mortgage lenders and homeowners at risk of default.

The mayor is using Philadelphia as a model, where such a plan was first enforced a year ago, and has been successful in saving 1,200 homes from foreclosure. Another 1,500 homes are currently in settlement negotiations. Mayor Villaraigosa says because of the Philadelphia program, more than 70 percent of participants in the program are able to stay in their homes.

For the program to be enacted in California, it requires state law, so Mayor Villaraigosa says he will ask legislators the week of June 15 to work on the law on an emergency basis.

As he announced his intentions on Thursday during a conference call, the mayor got the support from New York Mayor Michael Bloomberg, and Philadelphia Mayor Michael Nutter, who is credited with the creation of the program.

Aid from the federal government has come to local communities through the Neighborhood Stabilization Program, to deal with foreclosed properties, but the mayors say the aid comes after the fact, and does not address the prevention of foreclosures.

Los Angeles had almost 4,700 foreclosure sales scheduled in June, up by 37.6 percent during the first quarter of this year, compared to the same period in 2008.

The Associated Press contributed to this report.

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