California Rejects Foreclosure Protection Bill

To the chagrin of many consumers, the California Assembly voted against a measure that would have shielded homeowners from foreclosure while they were undergoing loan modification proceedings.

In a 36-30 vote, state lawmakers defeated a measure that would have barred lenders from foreclosing on a homeowner's property until after a final decision has been rendered on their modification application, according to the San Francisco Chronicle. The bill would have also allowed individuals to sue their lender if they failed to comply with the legislation.

Senator Mark Leno, who wrote the bill, expressed his dismay about the final vote, pledging to continue seeking options to help struggling homeowners.

"We think we had a very wise compromise (in the bill), unless your philosophy is that the lenders should not be held accountable and not have repercussions for their actions," Leno told the Chronicle.

Modifications and refinancing have provided debt relief to thousands of homeowners, but foreclosures continue to rise across the U.S. The latest RealtyTrac report estimates that foreclosure filings may surpass 3 million by the end of 2010.