California forgoes new foreclosure law

Critic says legislation was 'unnecessarily burdensome'

The California Assembly has rejected a bill that would have placed more homeowners under the protection of an existing state law that requires loan servicers to consider distressed borrowers for a loan modification before beginning foreclosure proceedings on them.

SB 1275, which sailed through the Senate on June 3 in a 21-12 vote, failed to garner enough support in two Assembly votes. The bill went down to defeat Monday in a 30-36 vote that was mostly on party lines, with Democrats supporting the bill and Republicans opposed.