Schwarzenegger is expected to call a special session to deal with revenue shortfalls.

The Issue: The Speaker of the California State Assembly Karen Bass, along with Assemblymen Pedro Nava and Ted Lieu, urged the Governor in writing to consider reforms to the mortgage industry during the special session expected to be called by the Governor after the November 4th election.  The Governor has said the purpose of the session will be to amend the California Budget, which is currently $3 billion short in projected revenues.

In the letter issued by the three Assembly Democrats, Bass discusses how “mortgage reform and forclosure prevention has been at the top of the Assembly’s legislative agenda…” and urges the governor to consider those matters during the next legislative session.

View the full text of the letter here

The letter continues to talk about the relevance of discussions of the mortgage industry during the special session:

We understand you are calling a special session to address the state budget.  Four billion dollars of last year’s budget deficit are attributable to the forclosure crisis and billions more will be lost this year if nothing is done to address this crisis.  The special session would be an appropriate time to address California’s mortgage system.

Analysis: Budget should be first, Mortgage system second.

The budget should and will be the highest priority going into a special session for probably no longer than 3 weeks.  Given this year’s budget stalemate, I will be happy to see a budget amendment completed in that short time period.  The Assembly Democrats might be too ambitious if they expect to pass a mortgage reform bill too.

There is also the issue of the Speaker’s Stimulus plan.  A great idea that will never get accomplished if it is crammed into the same 3 week timeframe as the mortgage system and the budget deficit.

It’s good to see the Assembly leadership hitting the ground running and I have high hopes for many accomplishments, but let’s be reasonable.  Passing a balanced, reasonable budget should be first priority over all else.