California Tries to Find Cure for Mortgage Woes

After listening to more than a dozen economists, lenders, consumer advocates, and regulators testify, California lawmakers say they still have no magic answers for solving California’s troubled mortgage market.
By: Marc Lifshe: The Los Angeles Times
"Legislative efforts to intervene in the market are not the answer," says state Sen. Michael Machado (D-Linden), chairman of the Senate Banking, Finance and Insurance Committee. "They can cause befuddlement at best."

Machado is pushing two bills through the state legislature that would make modest changes in how lenders offer low-interest, adjustable-rate mortgages to borrowers who can't afford payments on traditional, fixed-rate loans.

One bill would put federal loan-affordability guidelines into state law, and the second would boost the number of state examiners responding to consumer complaints of unethical lending practices.