When lawmakers attack

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News item from today’s L.A.Times: ‘The leader of the state Senate on Thursday joined a growing legion of state and federal officials calling to protect Californians from losing their homes and to ban lending practices that helped create the growing sub-prime mortgage crisis.’

More: ‘Lenders also would be required to hold face-to-face meetings with borrowers. The sit-downs would explore the possibility of restructuring adjustable-rate loans and provide lists of federal-government-approved counselors to help them navigate the complex legal process.’

If you read this interview with Treasury Secretary Henry Paulson, he made one thing pretty clear: the servicers don’t have the resources -- they don’t have enough people -- to analyze loans quickly on a case-by-case basis. You may think that’s ridiculous, or unacceptable, but that’s what the servicers are telling the federal government, and the government believes them. That, in turn, is why Paulson believes it makes sense to come up with a ‘three sizes fits all’ way to handle sub-prime borrowers in trouble -- because the servicers will otherwise never sort through the loans quickly enough.

It seems the California state Senate believes otherwise -- that servicers can handle these loans not just one at a time, but face to face. Man, this whole thing is messy.

Your thoughts? Comments? Email story tips to peter.viles@latimes.com.