Michael Lea, Corky McMillin Center for Real Estate
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Michael Lea, Corky McMillin Center for Real Estate


{rtf1ansiansicpg1252cocoartf1038cocoasubrtf360
{fonttblf0fswissfcharset0 Helvetica;} {colortbl;red255green255blue255;}
margl1440margr1440vieww9000viewh8400viewkind0 pardtx720tx1440tx2160tx2880tx3600tx4320tx5040tx5760tx6480tx7200tx7920tx8640qlqnaturalpardirnatural f0fs24 cf0>>Joanne: THE BILLS ARE
DESIGNED TO PROTECT HOME OWNERS CAUGHT UP IN THE MORTGAGE AND
FORECLOSURE CRISIS. JOINING ME TO EXPLAIN WHAT THE
PROPOSED LEGISLATION WOULD DO IS DR. MICHAEL LEA.
THANK YOU FOR BEING HERE DR. LEA.
>>THANK YOU FOR INVITING ME.>>Joanne: LET’S BEGIN WITH THE
KEY POINTS. I READ SOME OF THE BULLET POINTS
AND SOME SEEMED OBVIOUS AND YOU WOULD THINK ARE IN PLACE.
LIKE SIGNATURES AND NOTICE, BUT THEY ARE NOT, ARE THEY?
>>THEY’RE NOT. THAT HAD TO DO WITH SERVICE AND
PRACTICES. THEY HAVE BEEN ALL OVER THE MAP
NOT A STANDARDIZED WAY. SERVERS HAVE BEEN WORKING ON A
UNDER STAFFED PRESSURE SITUATION THAT HAS LED THEM TO CUT A LOST
CORNERS.>>Joanne: WHAT WOULD THE BILL
DO, WHAT WILL THE BILLS DO?>>ONE OF THE MAJOR OBJECTIVE OF
THE BILLS IS TO PROVIDE MORE OF A CERTAIN STANDARDIZED
TRANSPARENT PROCESS. IT HAS REQUIREMENTS FOR THE
LENDERS TO BASICALLY GO THROUGH AN OFFER MODIFICATION
ALTERNATIVES BEFORE INSTITUTING A FORECLOSURE PROCESS.
IT REQUIRES AND PUTS THE OWNNESS ON THEM TO HAVE THIS DONE RIGHT,
AVOID SOME OF THE KIND OF OUT SOURCING PROBLEMS THAT PLAGUED
EARLIER PROCESSES.>>Joanne: SO, THIS IS REALLY
ABOUT REGULATING THE FORECLOSURE PROCESS BY GOVERNMENT AS OPPOSED
TO IT BEING SELF REGULATED AS IT HAS BEEN IN THE PAST.
page ONE OF THE THINGS THE LAWS SEEM TO LOOK AT ARE CALLED “DUEL
TRACK FORECLOSURES.” WE HEAR STORES STORIES FROM
PEOPLE WHO SAY THE ONLY WAY THE BANK WOULD RENEGOTIATE MY LOAN
IS IF I WAS BEHIND ON THE MORTGAGE PAYMENT SO I DECIDED TO
STOP PAYING. IS THIS WHAT DUAL TRACK
FORECLOSURES ADDRESSES?>>IT’S BANKS ENGAGING IN
MODIFICATIONS DISCUSSIONS WITH BORROWERS AND PURSUING A
FORECLOSURE ACTION AT THE SAME TIME.
IN SOME CASES THE FORECLOSURE GETS AHEAD OF THE LOAN
MODIFICATION AND THE HOMEOWNER FINDS THEIR HOUSE IS UP FOR
SALE. THEY SAY I HAVE BEEN TALK TO GET
BANK ABOUT MODIFICATION. PART IS TWO PARTS OF THE BANK,
DIFFERENT PARTS ARE DOING THIS AND NOT TALKING TO EACH OTHER AT
LEAST THIS WOULD PUT A MORE FORMAL PROCESS.
I WANT TO CORRECT ONE THING. GOVERNMENT ISN’T SPECIFICALLY
REGULATING THIS. THIS IS STILL UP TO THE BANKS TO
COME UP WITH THESE PRACTICE THAT’S MEET THESE GUIDELINES,
AND THE REGULATION IF YOU WILL IS THE THREAT OF POTENTIAL LEGAL
ACTION THAT COULD OVERTURN A FORECLOSURE.
>>Joanne: OKAY. LET’S PICK UP ON THIS A LITTLE
BIT. IF THESE BILLS BECOME LAWS IT’S
NOT THE LAW OF THE LAND FOR BANKS.
IT SAYS YOU MUST FOLLOW THE REGULATIONS OR ELSE?
>>OR ELSE THERE IS A TASK FORCE BEING SET UP THAT COULD PURSUE
LEGAL ACTION. THERE ARE CIVIL PENALTIES THE
page BANK MAY. HAVE THERE ARE ALSO PROVISIONS
WITHIN THIS THAT WHICH THE BORROWER CAN GO TO COURT AND
CHALLENGE AN ACTION. THIS GIVES THEM MORE OF A
STANDING IN THE COURT.>>Joanne: SO, THE BOTTOM LINE
IS IF THESE BECOME LAW, WHAT HAPPENS TO OUR HOUSING MARKET IN
SAN DIEGO COUNTY? DOES IT GET BETTER?
>>MARGINALLY. THIS WON’T HAVE A BIG EFFECT ON
THE HOUSING MARKET. ONE REASON IS THAT THE MAGNITUDE
OF THE SETTLEMENT EVEN THOUGH CALIFORNIA GOT A LION SHARE OF
THAT IS STILL SMALL RELATIVE TO THE TOTAL MAGNITUDE OF THE
PROBLEM.>>Joanne: YOU ARE TALK ABOUT
THE PAST SETTLEMENT A COUPLE OF WEEKS AGO.
>>YES. THE HOME OWNERS BILL OF RIGHTS
IS COTIFYING THE SETTLEMENT. THE SETTLEMENT WAS FOR FIVE
BANKS. THIS IS MORE WIDESPREAD.
>>Joanne: HOW ARE THE BANKS REACTING TO THIS?
>>I HAVEN’T SEEN SPECIFIC COMMENTS FROM THEM.
I THINK THE REASON, ONE REASON THE BANKS ENTERED INTO THIS
AGREEMENT IS TO KIND OF REMOVE SOME UNCERTAINTY ABOUT FUTURE
LIT GAYS THAT CAN COME FROM STATE, FEDERAL OR PRIVATE
SOURCES. THE SETTLEMENT GOES PART WAY BUT
CERTAINLY NOT ALL THE WAY IN IT. IF IT PROVIDED CERTAINTY THAT
WOULD BE GOOD FOR THE BANKS. THAT MAY GET THEM TO DO MORE
LENDING. THE PROBLEM IS THERE ARE A LOT
OF UNCERTAINTIES HERE. THE PROVISIONS OF THE SETTLEMENT
page ADD SIGNIFICANT COSTS AND RISKS TO THE BANKS.
SO ONE NEGATIVE OF THIS MAYBE THAT WE DON’T REALLY OPEN UP THE
LENDING SPIGOT SIGNIFICANTLY. THAT’S SOMETHING HOLDING BACK
THE HOUSING MARKET.>>Joanne: OKAY, THANK YOU
DR. LEA FOR BEING HERE.>>APPRECIATE IT.
THANK YOU, JOANNE.>>Dwane: THIS SATURDAY IS THE
DAY POP CULTURE FANS HAVE BEEN WAITING FOR.
COMIC CON SAYS BADGES FOR THIS YEAR EASY VENT WILL GO ON SALE
THIS SATURDAY MORNING AT 8:00 O’CLOCK.
>>>A PIECE OF SAN DIEGO HISTORY IS OPEN FOR BUSINESS AGAIN.
THE PLUNGE AT MISSION BEACH OPENED THIS MORNING NINE MONTHS
AFTER CLOSING BECAUSE OF A DISPUTE OVER THE LEASEHOLDER AND
RENOVATIONS. YESTERDAY THEY SIGNED OFF ON
REPAIR WORK ON THE BUILDING THAT HOUSES THE SALT WATER POOL.
THE PLUNGE SAYS IT’S THE FIRST STEP IN REVITALIZATION.
THE ATTENDANCE WAS LIGHT BUT THEY EXPECT BETTER ATTENDANCE
THIS WEEKEND WHEN THEY OFFER 25 CENT ADMISSION FOR RESIDENTS.
>>>COMING UP A BOY AND THE GENETIC RESEARCHER WHO FOUND THE
CAUSE OF HIS LIFE THREATENING GENETIC DISORDER.
THIS IS KPBS EVENING EDITION. }

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