Democrats leap frog opposition to mortgage reform

Foreclosures Spike As Banks Accelerate Loan Default Notices

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For sale signs are posted on a foreclosed house on Sept. 15, 2011 in Glendale, Calif. Democrats want to advance homeowner legislation so banks can't foreclose on homes while owners modify their loans.

Democratic leaders in Sacramento have announced that parts of the California Homeowner Bill of Rights will be heard by a legislative conference committee this week.

"I look forward to working with the Legislative leaders and members of the committee to bring transparency and fairness to our state's mortgage and foreclosure process," said Attorney General Kamala Harris in a statement.

It’s a way to bypass opposition to mortgage reform measures backed by Harris.

Attorney General Harris wants to stop banks from foreclosing on homeowners trying to modify their loans. Five banks agreed to that as part of a national settlement. Last week at the State Capitol, Harris said no bank in California should be able to do it.

"People who are in the process of pulling together tens of thousands of dollars from friends and family to pay that modified loan, they’re doing it in good faith, they’re doing it on time, let them keep their home, let’s keep our promise to them," she said.

Banking interests say halting foreclosures while loans are modified would make lending more expensive. They lobbied hard against two mortgage bills that Harris backed, and the chair of the Assembly Banking Committee tabled them.

But Democratic leaders now plan to leap frog the opposition. They want a joint committee to bring a bill directly to a floor vote in both houses. Republicans say that’s against legislative rules. Democrats say it’s not.

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