Valley legislators wary of bailout proposal

WASHINGTON -- The San Joaquin Valley may be the epicenter of the home mortgage meltdown, but regional lawmakers remain leery about the $700 billion bailout package being crafted on Capitol Hill.

Constituents are denouncing the bailout as a boon for Wall Street tycoons. Distressed homeowners are worrying it won't help them stave off foreclosure. Local bankers are watching closely.

"The administration's proposal has serious flaws," warned Rep. Dennis Cardoza, D-Merced, "and we've been working to craft a proposal that at least has some accountability and control."

Republicans, too, remain cautious about the bailout package that began life Saturday as a three-page document submitted by the White House. There are questions about the ultimate cost to taxpayers, the wisdom of intervening in the marketplace and the potential long-term consequences of speedy action.

"I'm very skeptical of anything that could come out of this House in one week," said Rep. George Radanovich, R-Mariposa. "It's going to be a hard sell for me."

While acknowledging that "we're on the hook to provide something," Radanovich stressed that Congress probably needed "more time" to make sure the package was well-constructed.

The congressional caution largely tracks what the lawmakers have been hearing from residents. The trend is all in one direction.

Democratic Sen. Dianne Feinstein said "virtually all" of the 12,000 e-mails and telephone calls her office has received have come from people opposed to the White House bailout proposal.

"The overwhelming majority of the calls have been to oppose the deal," Radanovich press secretary Spencer Pederson agreed.

Democratic Rep. Jim Costa of Fresno added that among his constituents who have been calling, "the notion of bailing out a number of wealthy executives on Wall Street is not something they support." Costa, like Feinstein and Democratic Sen. Barbara Boxer, wants a provision capping executive pay or bonuses.

Even with all the potential political problems, the bailout vote still could take place by the end of this week. Congressional leaders have insisted a package must move, because the volatile financial markets are expecting one.

The bill's language remains in the hands of a few lawmakers. Members of Congress have countered the White House's initial three-page proposal with 40-plus page proposals of their own.

The unresolved questions include some particularly relevant to the valley. Some Democrats, for instance, want to include language allowing federal bankruptcy judges to modify mortgage terms. Opposed by lenders, this proposal could resonate among the 15,416 petitioners who had U.S. Bankruptcy Court cases pending last year in Fresno, Modesto and Sacramento.

Democrats might have greater luck with proposals aiding individual mortgage holders, though the details are being worked out.

"It doesn't mean you forgive the loan," Cardoza said. "It means you figure out some way for the family to pay and stay in the home."

Costa and Cardoza are promoting a 90-day moratorium on home foreclosures. Even if one isn't included in the bailout, Costa said he and Cardoza will write federal mortgage companies Fannie Mae and Freddie Mac to urge a self-imposed moratorium.

"It is essential that (we) deal with those suffering from foreclosure," Costa said.