The housing slice of the nixed budget deal
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Comparing this statement received late Thursday from the Center for Responsible Lending with the state budget story in today’s Times made me go back and reread the Times story, which does not reference foreclosure or mortgages. The CRL statement would suggest those were major reasons for the veto threat. From the CRL:
Gov. Schwarzenegger today cited the legislature’s failure to include his mortgage foreclosure prevention proposals in today’s budget legislation as one of his reasons for not supporting the package. The governor’s foreclosure proposal would nudge mortgage servicers to adopt a more comprehensive and systematic approach to implementing loan modifications, or face a 90-day delay in the foreclosure process. ‘We look forward to working with all parties to address the shortcomings in the governor’s proposal, but in an urgent yet orderly process-not having it jammed into budget legislation in the dark of night,’ said Paul Leonard, director of the California office of the Center for Responsible Lending. As proposed, the governor’s plan lacked effective lender-specific data reporting and a review process to ensure that borrowers actually get modifications. ‘We are interested in getting more modifications, not just getting a rubber stamp on another nice-sounding plan with no teeth,’ Leonard added.
The San Francisco Chronicle version, however, did cite housing among the reasons for the governor’s veto threat:
But Schwarzenegger said the Democrats’ package lacked deeper cuts to welfare and senior assistance programs, flexibility to reduce school spending, and the elimination of two of 14 state employee holidays. The governor also wanted assistance for homeowners facing foreclosure, broad authority to relax environmental regulation on public work projects and more toll roads. ‘We have to act on behalf of the people,’ Schwarzenegger said. ‘We have to create jobs as quickly as possible, stimulate the economy, keep people in their homes. ... We don’t go out and punish people with extra fees and taxes.’
You can listen to (or read) the news conference yourself at the Office of the Governor website. Here’s a snipit of what he had to say:
I was very disappointed. I thought that when we negotiated that we negotiated a very balanced kind of a compromise where we agreed to raise revenues and increase revenues and also make the necessary cuts and also have a very, very strong economic stimulus package, or recovery package, right along with a bill that will help people stay in their homes for an extra 90 days, those that have to go into foreclosure. And really, the whole idea was that we help the people as much as possible in these very terrible times.
So is housing such a big reason for the rejection? Probably not. This is politics afterall. But that ‘extra 90 days’ just seems like slowing down the process of inevitable foreclosures.
--Lauren Beale
Thoughts? Comments?
