Governor vetoes mortgage modification fee bill

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A bill that would have prohibited mortgage consultants from charging advance fees to help with loan modifications has been vetoed by Gov. Arnold Schwarzenegger.

The measure by Assemblyman Pedro Nava (D-Santa Barbara) was aimed at allegedly predatory companies that collect advance payments for promises to lower monthly mortgage bills.

Nava sought to put off the fee payments until a mortgage is successfully rewritten with more favorable terms for the borrower.

In his veto message, Schwarzenegger said he supported the concept of the bill but disagreed that fees could be charged only if a loan modification is successful. ‘This would adversely affect legitimate businesses that provide loan modification services,’ the governor wrote.

-- Marc Lifsher