California Foreclosure Moratorium

California Foreclosure Moratorium
KCBS

Starting today, banks in California cannot foreclose a mortgage without either renegotiating the loan or giving the homeowner three months notice. There have been more than 365,000 foreclosures in California since 2007, with many more already scheduled. “California is ground zero for foreclosures. We’re getting about 80 to 90,000 foreclosure filings every month. That’s one every 30 seconds, so until we start mitigating the number of foreclosures, our economic recovery is going to be hampered,” said Assemblyman Ted Lieu, the Torrance Democrat who authored the bill.

Beware of Neighbor’s Home Foreclosure
New York Times

When it comes to selling your house or planning your next home equity line of credit, being a nosey neighbor could very well pay off. That’s one implication of a recent report from the Center for Responsible Lending, a consumer advocacy group based in Durham, N.C.  The report, which was released in May, focuses on the ripple effects of home foreclosures, and suggests that homeowners who are concerned about their home’s value should watch for signs of trouble among their closest neighbors. This year alone, it says, foreclosures will cause an estimated 69.5 million nearby homes to suffer price declines averaging $7,200 per home. The loss in property value could total $500 billion.

Details Set for Remake of Financial Regulations
Wall Street Journal

President Barack Obama is expected Wednesday to propose the most sweeping reorganization of financial-market supervision since the 1930s, a revamp that would touch almost every corner of banking from how mortgages are underwritten to the way exotic financial instruments are traded. At the center of the plan, which administration officials are referring to as a "white paper," is a move to remake powers of the Federal Reserve to oversee the biggest financial players, give the government the power to unwind and break up systemically important companies -- much like the Federal Deposit Insurance Corp. does with failed banks -- and create a new regulator for consumer-oriented financial products, according to people involved in the process.

A New Financial Foundation
By Timothy Geithner and Lawrence Summers
Washington Post

Over the past two years, we have faced the most severe financial crisis since the Great Depression. The financial system failed to perform its function as a reducer and distributor of risk. Instead, it magnified risks, precipitating an economic contraction that has hurt families and businesses around the world.  We have taken extraordinary measures to help put America on a path to recovery. But it is not enough to simply repair the damage. The economic pain felt by ordinary Americans is a daily reminder that, even as we labor toward recovery, we must begin today to build the foundation for a stronger and safer system