CA Senate Defeats Bill to Aid Troubled Homeowners, Neighborhoods

The California state Senate has defeated a bill aimed at the growing problem of foreclosed homes sitting vacant for months, drawing squatters and blighting neighborhoods.

The bill by Senate leader Don Perata would have fined lenders $1,000 a day for not maintaining vacant properties.

It failed Wednesday on a 26-14 vote, just short of the 27 votes needed for immediate passage. Perata, a Democrat from Oakland, had submitted it as urgency legislation so it could take effect right away if it had passed.

Most Republicans objected. They said the bill would put an unfair burden on banks and mortgage companies that already are under financial strain.

The bill also would have required four months' notice to borrowers before mortgage payments increased 10 percent or more.

Lending companies would have had to meet with homeowners to discuss options for restructuring their loans. And renters would have received 60 days' notice before being forced out of foreclosed homes.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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