F&M Bank CEO Walker Opposes "Homeowners Bill of Rights" Sought By CA Att'y Gen'l, Tells Council Foreclosure Process "Works Very Well," Says Homeowners Had Rights When They Signed Notes & To Interfere w/ Contractual Obligations "I Almost Think It's
Council Votes 9-0 To Advance Issue Of City Support To Committee For Hearing
|(May 9, 2012) -- In testimony urging the Long Beach City Council not to support efforts by CA Attorney General, Kamala Harris to have the state legislature enact a "Homeowners Bill of Rights," Farmers & Merchants Bank CEO Henry Walker said on Tuesday (May 8) that the home foreclosure process "works very well" and borrowers had rights when they signed notes agreeing to pay home loans back and to interfere with contractual loan obligations is wrong "in fact I almost think it's
Mr. Walker's statements infuriated several members of the Council audience, some of whom responded directly to his statements at the Council podium (audio clips of the exchange below). The Council ultimately voted 9-0 to advance an agendized proposal by Councilmembers Gerrie Schipske, Rae Gabelich and Steven Neal to a Council committee to take testimony on whether the City of Long Beach should support the Homeowners Bill of Rights, a package of bills focused on banking practices in the foreclosure process. The measures are opposed by (among others) the CA Bankers Association.
In response to the agendized item, F&M Bank CEO Walker stated:
Henry Walker: ...The foreclosure process works very well and it was designed to work well, and it has been slowed considerably by legislation over the past several years. The culprits of the problem we have are certainly a bad economy first. Second, were the rating agencies that rated the mortgages as high quality. There were a lot of low quality mortgages produced out there and a lot of people got in their homes with only five or ten percent down and yes, that equity is gone. And while the equity is gone, why continue the damage on the banking industry which is trying to put out new credits to individuals?
Mr. Walker's podium comments drew pointed public responses. One speaker, Diane Daly, her voice shaking in anger, said practices by the banking industry had helped precipitate the economic downturn.
Ms. Daly: ...[W]hat I am going to say has changed from what I had planned to say based on what the gentleman from the bank said. I'm furious that he would come up here and say that these foreclosure are because of the economy. The problems with the economy started with the banks. He neglected that fact.
And in response to statements by Mr. Walker that the proper remedy was to create jobs, another speaker, P. Joseph Rosenwald, said that another bank he'd encountered had outsourced former U.S.-based jobs to a telephone call center in the Philippines.
To hear audio of Mr. Walker's testimony [the only speaker in opposition] and Ms. Daly's response, click here.
Councilman Gary DeLong, a Republican running for Congress in a newly drawn Long Beach-West OC district, said federal regulations prevent banks from adopting more sensible practices...and said the proposed state legislation did nothing to address that issue. Councilwoman Schipske shot back that DeLong chairs the Council's federal legislation committee...and, noted that he hadn't taken up the federal regulatory issues in his committee and invited him to do so. Councilman DeLong replied that he would do so.
Councilman Robert Garcia made a substitute floor motion that sought to avoid a Council Committee hearing and put the City on record supporting the Homeowners Bill of Rights immediately. Councilman James Johnson replied that he (Johnson) was old fashioned and wanted to read the proposed state legislation first. Councilwoman Schipske likewise said that she wants all sides, pro and con, to have the opportunity to be heard in a Council committee (as her agenda item proposed) and Councilman Garcia ultimately withdrew his substitute motion.
The Council voted 9-0 to send the issue to the Council's state legislation Committee (O'Donnell, Garcia, Johnson) for a hearing. Several Councilmembers urged that this be done swiftly as the state legislation is poised for upcoming voted action and Committee chair O'Donnell said he would do so.
Last month, the "Homeowners Bill of Rights" stalled in Sacramento amid strong banking industry opposition. When a number of Democrats joined Republicans in declining to support the measure, Democrats in the legislative leadership moved the bills to a joint Assembly-Senate committee that can advance the legislation to their respective bodies for voted floor action.
For video of the full Council proceedings on the item, click here.
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