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Assemblyman Lieu’s 90-day Foreclosure Moratorium Similar to Schwarzenegger’s Program

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By : Leticia Carvalho    99 or more times read
California Governor Arnold Schwarzenegger has introduced a 90-day foreclosure moratorium. He called on for the implementation of the moratorium unless the banking industry can offer a comprehensive program to modify home loans that are on default.

After Schwarzenegger made his proposal, some Democratic lawmakers have considered re-introducing a measure aimed at lowering the number of homeowners who are in some form of foreclosure proceeding.

Assemblyman Ted Lieu, a Democrat of El Segundo, California, introduced a 120-day foreclosure moratorium, which in some aspects, is similar to the one proposed by Schwarzenegger.

Lieu was hoping to immediately bring the bill before the Assembly. However, the proposal got stuck on the Banking and Finance Committee and was never put on vote.

The committee opposed Lieu’s 120-day moratorium proposal, arguing that its duration is unacceptably long.

Lieu then revised his proposal and patterned it after Schwarzenegger’s 90-day foreclosure moratorium program. The lawmaker has always been a staunch supporter of programs to straighten out the home mortgage industry. He believed that stopping the surge of foreclosures is the most urgent issue that needs to be addressed by the national and local government.

Lieu pointed out that about one to one and a half years of risky adjustable-rate subprime loans have not been reset. He called on for an immediate action to address the foreclosure crisis to help ensure that funds will not be used to bail out financial companies.

Governor Schwarzenegger’s 90-day foreclosure moratorium gives him the authority to impose the law to California’s Commissioner of Corporations, a concession preferred by the banking industry
Lieu’s earlier version of the bill gave the power of enforcement to Business, Transportation and Housing. The assemblyman still plans to introduce a version of a bill on mortgage reform which aims to restrict subprime loan regulations. The bill, approved by the Legislature, was vetoed by Schwarzenegger in September of this year.
Leticia Carvalho has been educated in the finer points of the foreclosure market over 5 years.

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