47 Mortgage-Related Bills In California Legislature
SACRAMENTO, Calif.-In the wake of the mortgage and real estate market meltdowns, state legislatures have been eager to show they are on top of the problem.
The California legislature is no exception, with some 47 mortgage-related bills having been proposed. The state's credit unions are working to ensure abuses are addressed but that they are not inadvertently caught up in any bill that does more harm than good, and as such have been emphasizing to legislators that in 2010, credit unions in California made $1.3 billion in loan modifications, which represented 99% of delinquent mortgage loans. Of all first mortgages that have been modified by CUs, 80% are current.
"There were 47 bills aimed at mortgages, and most of them are targeted at the complaints lawmakers received from their constituents about lenders being non-responsive to requests for loan modifications," noted Bob Arnould, SVP-government affairs for the California league. "The legislators are up front about not wanting credit unions to be collateral damage when they go after these other lenders. When these bills arrive the first thing they ask is are credit unions included."
If there is a blessing for CUs, it is that 2011 is a non-election year, so adjournment will be Sept. 15, other than a break in August. Most of the original 47 bills have been pared down to a handful, but the debate will go on every day until the session closes.
"As large a problem as foreclosures continue to be in California, there will be substantial support for foreclosure and modification laws," said Arnould. "Therefore the effect those laws have on credit unions will be watched carefully."
California's legislature has term limits, which means turnover and an emphasis on ongoing education. "As it has been for the last two or three sessions, our focus is making sure foreclosure legislation does not impact the good guys. It will continue to be that way until unemployment rates decline and housing prices come back up."
Credit unions are equally wary of the Nevada legislature. "The bill that is watched most closely is a comprehensive change to foreclosure laws in Nevada," said Wayne Tew, CEO of $490-million Clark County Credit Union in Las Vegas, who serves on the governmental affairs committee for the Nevada league. "The summary does not tell a lot about what will really happen if it were to be enacted, but it has to do with the duties required of a lender before recording a default. There are similar bills in several states."