Assemblyman Ted Lieu has criticized Gov. Arnold Schwarzenegger’s decision to veto Assembly Bill (AB) 1830, which Lieu calls “a comprehensive, bi-partisan sub-prime mortgage reform bill that would have fixed a dysfunctional mortgage system.” Lieu represents most of the Argonaut readership area south of Santa Monica. The bill was one of several pieces of legislation that arrived at the governor’s office following the passage of the state budget last month.

“Wall Street won and Main Street lost when Gov. Schwarzenegger vetoed Assembly Bill 1830,” Lieu asserted. “The governor’s veto message repeats the same tired arguments that were made the last eight years by industry, the same arguments that led us to the worst mortgage and foreclosure crisis in American history.”

According to the assemblyman’s office, “over 60 percent of the subprime loans made in California during the mortgage frenzy” were sold or originated by entities regulated by the state and it was the unregulated selling of these loans that caused the massive foreclosure crisis in California and across America.

“The governor’s message that we should just do what the federal government does in terms of regulation is particularly galling and ignorant,” said Lieu, who sponsored the legislation. “Schwarzenegger’s belief that we should do nothing now and let the miniscule things he has put forward ‘work’ is outrageous. The governor’s much vaunted foreclosure prevention programs and the signing of bills last year that simply conformed to federal law has resulted in the following: 1,300 foreclosure filings a day in California, where we now lead the nation for the 19th consecutive month.

“We don’t have the luxury of doing nothing, because the continued unregulated selling of risky subprime loans continues to this day.”

Lieu said that despite Schwarzenegger’s veto of the bill, he would continue to seek passage of the bill again in the future.

“I will introduce this bill again because I believe the public will demand it,” vowed the assemblyman, who is the chair of the Assembly Rules Committee. “Maybe the governor doesn’t care that the mortgage system he refused to fix today has cost taxpayer’s $700 billion, but I know the public cares.”