Mortgage bill vetoed

Gov. Arnold Schwarzenegger said legislation to crack down on state-licensed brokers who put borrowers at risk was well-intentioned, but that it put the brokers at a competitive disadvantage. Schwarzenegger also said provisions allowing consumers to recover attorneys' fees when they win suits could lead to "increased litigation." Today's veto could be a hint of the challenge that state and national lawmakers will have in reforming the real estate and financial services business. While regulation appears to be in vogue again, there's little sign of bipartisan cooperation. From the LAT:

Assemblyman Ted Lieu's bill was supported by consumer groups and opposed by real estate and mortgage broker trade groups. Other financial groups, including bankers and credit unions, canceled their opposition during earlier negotiations. Even though the bill was watered down by the Legislature, Lieu said it would be one of the toughest state laws in the nation. He said it would strengthen regulation of the state's approximately 35,000 mortgage brokers, who arrange loans for home buyers.