California Governor Proposes Foreclosure Moratorium and Loan Modification Plan

California Governor Arnold Schwarzenegger issued a release yesterday wherein the Governor announced a plan to improve upon foreclosure relief programs by incentivizing loan modifications. Among other matters, the Governor proposed a 90-day stay of the foreclosure processes for each owner-occupied home subject to a first mortgage on which a Notice of Default has been filed. In addition, the release suggested a loan modification Model under which modifications will be based on a 38% housing debt-to-income ratio so that the modified loan is sustainable for the homeowner.

Additional details concerning the Governor’s plan are set forth in the release itself, which can be accessed here.

The plan is among the items the Governor will prescribe for immediate action during a Special Session of the Legislature which he plans to call. According to the release, that Session is needed to address both a state budget revenue shortfall and a package of legislation to stimulate California's economy.

Democrats in Congress Gear Up on Regulatory Reform

Following the election, press reports are replete with references to the fact that Democrats’ plans might well include the creation of a “systemic-risk regulator.” In this connection, we wish to call your attention to the October 21, 2008, testimony of Tim Ryan, President and CEO of SIFMA. In this testimony, Mr. Ryan states, “we believe Congress should consider the need for a financial markets stability regulator that has access to information about financial institutions of all kinds that might be systemically important, including banks, broker-dealers, insurance companies, hedge funds, private equity funds and others.”

Mr. Ryan’s testimony can be accessed here

Any questions concerning the work of SIFMA’s Asset Management Group regarding regulatory reform may be directed to staff member Joseph Sack at 212-313-1165.

Upcoming SIFMA Event

Important Publications:
SIFMA SmartBrief (past five issues)
SIFMA Regulatory Update
SIFMA Washington Weekly