ASSEMBLYMEMBER TED LIEU
53RD ASSEMBLY DISTRICT
For Immediate Release: January 14, 2008
Contact: David Ford
Phone: (916) 319-2053

Banking Committee Passes Lieu Bill To Force Data Disclosures By Mortgage Lenders

Sacramento, CA – The Assembly Committee on Banking and Finance today gave approval to Assembly Bill (AB) 69 by Assemblymember Ted Lieu.  The bill would require mortgage lenders to disclose to the State data regarding their programs to help homeowners facing foreclosure.  If signed into law, the bill would be the first of its kind in the nation.

“I hope that the data shows that the lenders are aggressively modifying loans to keep borrowers in their homes,” Lieu said.  “But I fear that it may show otherwise.”

Since the mortgage crisis began last year, many of the largest lenders have announced “workout” programs, where they are contacting their customers facing foreclosure in an attempt to come to an agreement.  The programs, however, are entirely voluntary on the part of the lenders, and many mortgagees are reporting difficulty accessing them. 

AB 69 would require mortgage lenders to report data on a monthly basis to the Department of Corporations, and state-chartered banks and credit unions to report to the Department of Financial Institutions.  The required data would include the number of loans in default, and the number that have been modified through agreement by the lender and the borrower.

During the hearing, the bill received support from several of California’s leading consumer groups, including the Center for Responsible Lending (CRL), the California Reinvestment Coalition, and the Consumer’s Union. 

Paul Leonard, the Director of the California Office of CRL, spoke of the need for this data: “The lenders have for months been making promises to assist borrowers to avoid foreclosures.   But until now, there has been no way to measure the success of their efforts.   This bill establishes a way for the public and policymakers to hold lenders accountable.”

Jack Williams, Immediate Past President of the California Association of Mortgage Brokers, explained the difficulty of obtaining a loan modification: “I’ve been in the business for a long time, and I know all the lingo.  And I still get the run-around and get frustrated trying to work with the lenders.  How is a customer supposed to figure this out?”

AB 69 will now go to the Assembly Appropriations Committee.