California Mortgage Bankers Applauds Senate Action

Calls Rejection of 'California-Only' Proposals a ''Prudent''
Decision
SACRAMENTO, Calif.--(Business Wire)--
The California Mortgage Bankers Association (CMBA) released the
following statement this morning, in reaction to the state Senate
Banking, Finance & Insurance hearing held Wednesday, June 18, 2008:

"Yesterday, the State Senate Banking, Finance & Insurance
Committee heard a package of bills that proposed drastic changes in
the way mortgage loans are handled in California.

None of the bills considered yesterday would stop any of the
foreclosures currently under way in the market. The California
Mortgage Bankers Association did reach agreement on a comprehensive
measure, SB 1137 by Senator Don Perata that is designed to provide
additional protections for borrowers facing foreclosure.

All the measures would go into effect next year and focus on
removing certain loans from the market and adding penalties to other
loan products. The net result would have severely impacted the flow of
capital to California's mortgage market.

The California Mortgage Bankers Association opposed many of these
measures because they further restrict credit to borrowers and
perpetuate the liquidity crisis that is stalling the movement of homes
for sale throughout the state.

It was also important to make sure that California efforts to
reform the mortgage market are consistent with the current federal
efforts to regulate subprime loans. New federal rules have been
proposed and will likely become effective this summer. These rules
will apply to all lenders, whether they are organized under state or
federal law. Any laws passed in California that conflict with federal
law would only serve to promote litigation and drive lending prices in
California much higher than they are today.

While consumer groups are complaining about the Senate's rejection
of their proposals, we believe that the Senate acted prudently to
ensure the continual availability of loan products to consumers with
less than perfect credit.

If the package of bills had all passed as they were introduced,
the state would have faced a drastic reduction in the loan products
available to working families, further postponing their hopes of
becoming homeowners in California's pricey market.

As lenders, we believe that reforms are needed and several bills
that are still moving forward will help reform the market without
impairing market liquidity. Those bills include:

Senator Machado's package of bills to ensure regulatory oversight
and improve market liquidity, including:

-- SB 1053 - broker regulation

-- SB 1054 - broker fraud protection

-- SB 1055 - tax credits for borrowers

SB 1137 (Perata) - The recent amendments develop new processes to
reach out to homeowners prior to foreclosures to provide them with
additional information on the process and continue efforts to avoid
foreclosure where possible. It also provides additional notices to
tenants of foreclosed properties and creates new requirements for the
maintenance of foreclosed properties to protected impacted
neighborhoods.

A.J.R. No. 45 (Coto) - This measure would memorialize the
President and the Congress of the United States to permanently
increase the federal conforming mortgage loan limit to 125% of the
area median price in high-cost areas of California, but in no case to
exceed $729,750."

The California Mortgage Bankers Association is the leading
statewide organization representing the residential and commercial
real estate finance industry.

California Mortgage Bankers Association
Dustin Hobbs, 916-446-7100
Communications Director
Dustin@CMBA.com

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