Dem maneuver in Legislature could slam housing market

April 20, 2012 - By admin

April 20, 2012

By Katy Grimes

Democratic Leaders in the Legislature have figured out a clever way to bypass the legislative committee process, in order to ensure the results they want. This latest legislative trickery and rule manipulation created quite a stir at the state Capitol Thursday.

Earlier in the week, without warning, the Assembly Banking and Finance Committee, chaired by Assemblyman Mike Eng, D-Monterey Park, dropped three bills off the schedule. But these weren’t just any bills, they were the bills which make up the mortgage reform “Homeowner Bill of Rights” package, sponsored by Democratic Attorney General Kamala Harris.

Ostensibly, this bill package would reform California’s mortgage and real estate crisis.

However, after the Harris bill package dropped off the Assembly committee schedule, a related bill, AB 278 by Assemblyman Jerry Hill, D-San Mateo, popped up on the Senate floor Thursday, and was shoved through to passage, with only support from Democrats.

AB 278 is just a shill-bill dealing with unlicensed real estate agents. But it is being used fto trigger the necessary procedures required to create a Democratic-controlled conference committee to manage the outcome of the Attorney General’s bills.

Supporters of the conference committee option said that, because the Harris bill package was complex, the conference committee would provide lawmakers the opportunity to deal with the major policy changes.

But others are outraged and say that creating the legislative conference committee will allow the bill package to bypass the entire committee policy and finance process, as well as avoid scrutiny by the public.

Homeowners Bill of Rights

Harris is pushing lawmakers to pass the Homeowners Bill of Rights, patterned after President Barack Obama’s legislation of the same name. The legislation is supposed to protect homeowners facing foreclosure.

But bankers have objections.

Small banks and local credit unions did not cause the mortgage crisis — investment bankers did.

But that’s not stopping lawmakers from punishing all bankers, regardless of the ramifications.

A $25 billion national settlement agreement reached in February, struck among the Department of Justice, the Department of Housing and Urban Development, 49 state attorneys general and the country’s five largest mortgage loan servicers: Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., Wells Fargo & Company and Ally Financial Inc., according to Forbes.

The five biggest U.S. banks agreed to the deal, which would impose a ban on all banks from filing a foreclosure notice when a homeowner is in the middle of the loan modification process.

The national ban expires in three years, but Harris is pushing for California to keep the ban in place permanently.

Critics say that the bill package in the California Legislature may actually pave the way for more lawsuits, and slow any recent improvements in the already slow-to-recover housing market. With economists predicting another mortgage meltdown, the American economy could be in for an economic hurricane.

Opponents also say that the legislation would create expensive, new lending obligations, which would likely result in a much higher cost to borrow money, which could be an additional blow to the housing market.

However, instead of allowing Harris to defend her bills in the committee hearing, legislators bowed to pressure from above, and pulled the bills from the committee calendar.

Talk around the Capitol after the hearing episode was that the order to pull the bills came from the highest office in the state, and referred to a feud between Gov. Jerry Brown and Harris. But this has not been confirmed.

In the right corner…

Thursday’s maneuver did not go down without a fight. Sen. Sam Blakeslee, R-San Luis Obispo, urged Senators to oppose AB 278, and reminded colleagues that the Legislature had recently passed dozens of spot bills, weakening the legislative process. “This is not the historical norm,” Blakeslee said.

Spot bills are empty bills which do not yet contain language, but will be used at the end of the legislative session to pass laws legislators couldn’t get passed through the traditional committee process.

Blakeslee said that in the past, only the state’s 2010 water bond, the 2004 workers compensation reform, and electricity deregulation had been dealt with in conference committee, and only after already being vetted using the standard committee process.

A conference committee is traditionally used to work out the differences which committees could not.

“We are speaking about a bill on real estate,” Blakeslee said.

Blakeslee explained that by avoiding the usual and legal committee process, the public would never hear the policy and financial debate surrounding the bills. He expressed his irritation that the Senate Banking and Finance committee, of which Blakeslee is the vice chairman, would never have a chance to weigh in on the bills.

“There’s not precedence in the use of the conference committee,” Blakeslee said. “I am standing in defense of the majority party. It raises serious questions about to what lengths this body will go to jam through legislation without the types of processes we have historically used.”

“These are regular policy issues. “We should not pervert our process to produce the desired outcome,” Blakeslee said.

“And to the minority party, do not surrender your constitutional power,” Blakeslee added.

Leadership weighs in

“To have hearings on policy is right,” said Senate Minority Leader Bob Huff, R-Diamond Bar. “To obfuscate is not.” Huff pointed out that the Senate Joint Rules require that all bills, other than budget bills, must be heard by policy committees of each house.

“We form a conference committee to find a meeting of the minds,” Huff said. “Without normal transparency, major policy issues here will be decided on in some smoke-filled back room. Trampling on the rules is a slippery slope.”

“Read your rules,” Senate President Pro Tem Darrell Steinberg, D-Sacramento replied. “Read your Senate rules. Because we pride ourselves on following the rules, and in this instance we have done so.”

“We’re not trying to hide anything,” said Sen. Juan Vargas, D-San Diego. “Important things can be done in the conference committee.”

Capitol staffers explained that the conference committee members, appointed by Assembly Speaker John A. Pérez, and Senate President Pro Tem Darrell Steinberg, will consist of six members in total, made up of one Republican and two Democrats from each house. Committee appointments will be announced next week.

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  1. […]   Earlier in the week, without warning, the Assembly Banking and Finance Committee, chaired by Assemblyman Mike Eng, D-Monterey Park, dropped three bills off the schedule. But these weren’t just any bills, they were the bills which make up the mortgage reform “Homeowner Bill of Rights” package, sponsored by Democratic Attorney General Kamala Harris.   Ostensibly, this bill package would reform California’s mortgage and real estate crisis.   However, after the Harris bill package dropped off the Assembly committee schedule, a related bill, AB 278 by Assemblyman Jerry Hill, D-San Mateo, popped up on the Senate floor Thursday, and was shoved through to passage, with only support from Democrats.   Read the complete story on CalWatchdog.org […]

  2. Beelzebub says:

    First of all, Harris, the head cop in California, walks in lockstep with the Obama goons. She doesn’t expel gas until it she gets approved in DC first. The Feds own her lock, stock and barrel. She signed onto that Fed mortgage settlement with the TBTF’s because it gave instant defacto immunity to the crooked banksters and because the largest portion of the settlement goes directly into the state coffers – not to the homeowners damaged by fraudclosuregate. Research it if you question me.

    Do you remember the State of the Union Address 3 months ago? Obama said that he was establishing a ‘Mortgage Fraud Task Force’ to go after the criminals. Calls put into DC goons revealed that such a ‘task force’ does not exist and is not being formed. So Obama lied again. But you will not see the mainstream press report it. Obama has been tefloned and is above criticism.

    Obama told us that Trayvon Martin could have been his son. But you won’t hear him mention anything about the photos of the back of George Zimmerman’s head minutes after the altercation in Sanford, Fl that were released at today’s bond hearing. Covered with blood. I see nothing about it on the major news websites that showed Zimmerman repeatedly on video walking through the police precinct while being detained right after the incident and claiming there was no evidence of a head injury. Now all of them are running for cover. You cannot trust the mainstream media. You just can’t.

    Face it. In this country the pols are owned by the special interests. It’s not about right or wrong anymore. And it’s not even about justice or injustice. It’s about what the owners demand.

  3. CalWatchdog says:

    Beelzebub – I agree with everything you said. But taxpayers are boiling mad – I think a revolution is festering just under the surface. It’s not over yet. It’s why I do what I do.

    Katy Grimes

  4. Beelzebub says:

    I don’t consider you the mainstream media, Katy. Overall, I think you and your colleagues do a very good job at exposing detailed truthisms that we just don’t get in the big pravdatized newspapers and TV news. But much of the stuff you print goes over the head of the common ham and egger. The only way they will understand the severity of the problem is when they can no longer afford a six pack of beer and pay the cable bill. And JoeSixPack must actively participate in the process for change to occur. Just look at what a few loud mouthed activists did to George Zimmerman. The squeaky wheel in America always get greased. It has nothing to do with justice or injustice. The pols vividly remember 1992.

  5. Rex The Wonder Dog! says:

    I think a revolution is festering just under the surface. It’s not over yet. It’s why I do what I do.

    Oh, I KNOW it is festering. When those 1A-1G tax hikes FAILED by a wide margin, I knew people were mad. When Jerry Clown tried to do the exact same thing but for FIVE YEARS-then I knew we were at the end of the road.

    I KNOW the Clown tax hikes are going to fail. You see the anger in comments all across this state on media websites on the tax hike story/s. They WILL NOT raise taxes when these gov pensions are BKing us.

    I cannot wait until November, the tax hikes will fail-spectacularly- and Clown will start cuts that hurt the poorest of the poor while leaving the $300K GED educated gov public safety worker untouched.

  6. Ted Steele, Janitor says:

    The Poodle is right! The sky is falling!!!!!

  7. Frank says:

    You say, “Small banks and local credit unions did not cause the mortgage crisis — investment bankers did.” That is not entirely true. The small banks and credit unions had a role in approving loans which would not have been approved 20 years ago because they were able to market those loans to investment banks. If they had been forced to carry those poorly vetted loans on their own books they would not have been so cavalier in approving them. In short, the whole process was faulty, not just at the investment bank level.

  8. Beelzebub says:

    Frank – there are a good number of small banks and CU’s that actually did play by the rules and abided by their own quality underwriting standards and refused mortgage loans to high risk applicants. The travesty of it all is that many of those institutions were punished after the fact and were forced to pay higher underwriting fees and premiums to the FDIC for the sins of the Too Big To Fails. Go talk to a small banker who kept his nose clean and played by the rules during the mortgage scam. Afterwards the government rubbed his nose in the TBTF’s feces. And that’s the truth, sir. Research it.

  9. Rex The Wonder Dog! says:

    The small banks and credit unions had a role in approving loans which would not have been approved 20 years ago because they were able to market those loans to investment banks.

    And therein lies the problem, allowing these frauds to be sold ion a secondary market. They should have forced all originators to keep 30%-50% fo all loans they made. That would prevent the massive fraud we saw because then EVERYONE would have skin in the game. Once you let people gamble with other people’s money and they have no skin of their own in the game then the fraud sets in.

  10. patrick says:

    why 30% to 50%?

  11. Beelzebub says:

    Frontline @ PBS has been pretty good about exposing the massive fraud and corruption that lead to the economic meltdown.

    Starting April 24th they are coming out with another series – “Money, Power and Wall Street” that I would suggest that all watch:

    http://www.pbs.org/wgbh/pages/frontline/money-power-wall-street/

    To date none of the big dirty players have been arrested, indicted or prosecuted. Not even Corzine from MF Global.

    Obama has turned out to be just another fraud and liar who protects these financial terrorists. He is totally in bed with them. Go look at his list of campaign contributors. The financial crooks are top on his list. ;)

  12. Beelzebub says:

    Here, you don’t believe me???

    Scroll down to those who have raised $500,000+ for Obama in Qrt. 1.

    Jon Corzine is on the list in alphabetical order:

    http://www.barackobama.com/2012-first-quarter-volunteer-fundraisers

    I rest my case.

    Your nation is owned lock, stock and barrel.

    But go ahead and visit your local polling precinct in November and get some free cookies and coffee. What the frack. Next year they might be serving cavier to get you to show up! :D Besides, you can catch up on all the latest neighborhood gossip that the bait swallowers provide you at no charge!!! HAH! :D

  13. Beelzebub says:

    Go google some of the CA names on the $500,000+ list. Most are entertainment swine. Seriously, what does Hollyweird do other than pollute human minds with garbage that is utterly worthless? If you are addicted to Hollyweird films go get help. These people are not your friends. It’s all about mind control. They want you to think like they do – and if you don’t – they will collect money and give it to Obama so he will force their will upon you.

    Break free.

  14. queeg says:

    Hollywood is dead on it’s feet….a rotting shell…forget it like your last fast food meal…

  15. Rex The Wonder Dog! says:

    why 30% to 50%?

    Because the BIGGER the chunk the less likely you will try to game or defraud the system. Some liquidity is needed by selling in teh secondary market, but no more than 50% -70% of trust deeds should be sold.

  16. Beelzebub says:

    Looks as if Corzine is doing God’s work. Right after MF Global blew up Corzine’s money was too dirty for Obama to handle. Remember? But the latest sugar daddy list (see above) shows the long legged mac daddy is right back on board. Auld Lang Syne. If Obama had a son Jon Corzine would be his godfather.

  17. queeg says:

    Greed must be good. Over 50% love Hope and Change!

  18. Beelzebub says:

    Yep. Corzine was like a leper as far as Obama was concerned when MF Global was big in the news. Now that the mainstream press has buried the story and all the criminal shennanigans that went along with it – Obama and Corzine are busom buddies again. Funny what a difference that a month and a few $mil$ make, eh??? The rot has made it’s way right to the very top.

    Remember when Obama promised us that he was going to go after those “fat cats on Wall Street”? heh. He sure did. He went after them and brought them right into the fold. Now they all share the same bed. :)

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