Foreclosure bill falls one vote short

January 30, 2008 8:10:27 PM PST
A record number of Californians are struggling with the threat of foreclosure. Thursday, state lawmakers debated a bill that would require lenders to do more to help. The bill fell one vote short, but Democrats aren't giving up.

"I reached out to my lender to ask them for help and they refused to help me," says Elizabeth Hopes, facing foreclosure in Oakland.

So many more Californians are about to lose their homes during this foreclosure crisis. "Sent a payment to my lender ... they rejected the payment and sent the money back," says Cynthia Fields, facing foreclosure in San Bernardino.

But even an impassioned plea from the Senate Leader couldn't convince enough lawmakers to pass his Foreclosure Prevention bill.

"It isn't the water that causes drowning. It's staying there. Let's help people out," says Sen. Don Perata, D-Oakland.

Because it's designated as an "urgency bill" so it could take effect right away, it needed two Republicans to break ranks and support it. Only one GOP member crossed over.

The bill would have required lenders to:
- Send out three notices beginning 4 months in advanced that the mortgage rate is re-setting
- Set up an in-person meeting to go over loan restructuring options
- Notify renters that the property owner is facing foreclosure
Republicans believed the bill would put an unfair burden on banks and mortgage companies that are already under financial strain.

"The requirement for notices to of a borrower at 120, 90 and 45 days prior to an increased payment amount is simply unworkable," says State Sen. Dave Cox, R-Fair Oaks.

Since the proposal was only one vote short, community groups have a plan to pressure Republican lawmakers to change their minds.
They'll target districts whose Senators are up for re-election this year and point out how the lawmaker voted.
"Make the legislators realize what's going on in their districts. Make them realize there's actually a difference they can make," says Ronald Coleman, California Acorn.
Senator Perata intends to re-introduce his bill again next week.