Nov 29, 2008 10:20 pm US/Pacific
SoCal Assemblyman Pushes Mortgage Moratorium Plan
EL SEGUNDO (CBS) ―
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Lieu plans on passing some version of a mortgage reform bill in order to tighten up regulations of subprime loans. The Legislature approved such a bill, AB1830, but the governor vetoed it in September.
AP
An assemblyman from the South Bay says he will try again to get the California Legislature to approve a moratorium on mortgage foreclosures, a plan backed by the governor but strongly opposed by the state's banks, it was reported Saturday.
During the recent special session in the State Legislature, Assemblyman Ted Lieu, D-El Segundo, introduced a plan that called for a 120-day moratorium on foreclosures. Gov. Arnold Schwarzenegger had called for the 90-day moratorium, so that banks could come up with a comprehensive plan to modify troubled home loans, the Daily Breeze reported.
Banking groups opposed Lieu's November plan, and there were indications, the Daily Breeze reported, that the Governor's Office believed a 120-day moratorium would be unacceptably long.
Lieu's piece of legislation got bogged down in the Assembly's Banking and Finance Committee and never came to a vote.
In Lieu's new bill, which he will offer new week, will embrace Schwarzengger's 90-day moratorium. The new proposal also gives the power to enforce the new law to the state Commissioner of Corporations, which the banking industry seems to prefer, the newspaper reported.
The El Segundo assemblyman, who leads the Democrats' efforts to reform the mortgage industry, said that reducing the number of foreclosures is now the most urgent priority.
"There's a least another year to a year and a half of a large wave of adjustable-rate, risky subprime loans that have not reset," Lieu told the Daily Breeze. "Anything we do now to address this crisis will help ensure that your money is not sent to bail out AIG and other Wall Street firms."
Lieu plans on passing some version of a mortgage reform bill in order to tighten up regulations of subprime loans. The Legislature approved such a bill, AB1830, but the governor vetoed it in September.
(© 2008 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)
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