[courtesy of California Progress Report]

AB 1830 Will Curb Abuses

by Brian Leubitz [courtesy of Calitics - Front Page]

[courtesy of The California Majority Report]

Democratic Assemblyman Ted Lieu, chair of the Assembly Banking and Finance Committee, blasted President's anticipated announcement of a plan to freeze rates on some subprime loans. Here's his statement issued late Wednesday:

"The mortgage foreclosure crisis is a rapidly accelerating crisis that threatens to put our economy into a recession.  While I welcome President George Bush’s anticipated announcement of a narrow plan to freeze the rates on certain adjustable subprime loans, I believe it falls far short of what is necessary to address the crisis.
 
The media has reported that the Bush plan has been whittled down by industry to a select slice of borrowers: those who are current on subprime hybrid mortgages made between Jan. 1, 2005 and July 31, 2007 which are to due to reset between January 2008 and July 2010.  Furthermore, eligible borrowers would be further weeded out to those who were not more than 60 days delinquent over the past year, have less than 3% equity in their homes, and are unable to afford an upward adjustment in their interest rate. These borrowers would see their rate frozen at the introductory price for five years.  Analysts expect this plan to help 12% or less of borrowers in distress.

There's more...

[courtesy of California Progress Report]

By Ted Lieu
Chair
California State Assembly Banking and Finance Committee

The mortgage foreclosure crisis is a rapidly accelerating crisis that threatens to put our economy into a recession. While I welcome President George Bush’s anticipated announcement of a narrow plan to freeze the rates on certain adjustable subprime loans, I believe it falls far short of what is necessary to address the crisis.

The media has reported that the Bush plan has been whittled down by industry to a select slice of borrowers: those who are current on subprime hybrid mortgages made between Jan. 1, 2005 and July 31, 2007 which are to due to reset between January 2008 and July 2010. Furthermore, eligible borrowers would be further weeded out to those who were not more than 60 days delinquent over the past year, have less than 3% equity in their homes, and are unable to afford an upward adjustment in their interest rate. These borrowers would see their rate frozen at the introductory price for five years. Analysts expect this plan to help 12% or less of borrowers in distress.

[courtesy of The California Majority Report]

The Assembly Democrats' call for a special session to address the state’s subprime mortgage foreclosure crisis was met by a rather predictable response from the Legislature’s Republican leadership.

According to the Associated Press, Assembly Republican Leader Mike Villines believes the issue should be pushed off until next year, even though lenders filed more than 72,000 notices of default last quarter alone. Senate Republican Leader Dick Ackerman was equally dismissive, saying: "'There is no need for a special session'. ... The Legislature must take care not to overreact and harm the long-term lending market."

Then again, why would the foreclosure crisis be an issue of concern for Ackerman? Senator Ackerman, an "avid sailor," achieved his top legislative priority of the year months ago by helping yacht owners http://www.sacbee.com/110/story/354985.html avoid paying taxes on their luxury boats, a costly loophole with a $45 million annual price tag.