California is ground zero in the nation’s subprime mortgage foreclosure crisis. According to Realty Trac, California ranks third among all states, and is home to six of the 10 hardest hit metropolitan areas in the country, from Sacramento down to Stockton and Fresno, and through the Inland Empire to San Diego. Like the demographics of subprime lending, foreclosures are falling disproportionately on Latino and African-American homeowners, taking not just most of their wealth, but also the chance to pass along wealth to their children. All told, more than one in five of all subprime mortgages originated in 2006 will end in foreclosure, with as many as 500,000 lost homes coming from loans made between 1998 and 2006. And foreclosure stories dot the front pages and business pages of all California’s major dailies.

Despite the large and growing sweep of the foreclosure problem, the response of state lawmakers has been muted. Unlike other hard hit states like Ohio, Massachusetts and Colorado, California lawmakers have not even attempted to provide any relief to subprime borrowers who are at risk of foreclosure. These states have mobilized stakeholders, energy and resources to fund and train housing counselors to help borrowers negotiate with lenders and have crafted creative financing mechanisms to help borrowers in crisis. Other states, like North Carolina and Maine, have embraced far-reaching reforms to provide subprime borrowers with greater protections in the future. By contrast, California took almost a year to enact limited federal regulatory protections (after 35 other states) and passed ineffective reforms to the appraisal process. Lawmakers could not even agree on providing non-English speakers the right to receive a simple summary of key terms in their native language.

I’m not sure what explains the lack of attention to this immediate crisis which threatens to plummet California’s economy into recession, though I have a few theories. First, the crisis emerged last winter well after the state’s big ticket legislative agenda—including prison reform, the state budget and health care reform had been set. Second, the legislature’s banking committees are dominated by industry-friendly moderates who are expected to generate large campaign contributions from banks and other mortgage lenders, while those affected by foreclosures are a diffuse, disorganized constituency who don’t necessarily look to Sacramento for help. Third, the sheer size and scope of the problem may have paralyzed lawmakers from attempting to tackle it despite the massive media attention.

Whatever the reason, it’s time for the legislature and the governor to show some leadership and work immediately to help borrowers at risk of losing their homes right now and provide subprime borrowers with greater protections in the future.

Paul Leonard directs the California operations of the Center for Responsible Lending (CRL) a non-profit, non-partisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation’s largest community development financial institutions.