A state Senate bill pressuring lenders to deal more effectively with struggling mortgage borrowers cleared a key legislative hurdle Wednesday despite opposition by the lending industry. The bill, co-authored by Sens. Mark Leno, D-San Francisco, and Senate President Pro Tem Darrell Steinberg, D-Sacramento, would make lenders do more to modify loans before filing a notice of default, the first step in the foreclosure process. The changes would force lenders to deal earlier with problems and potential solutions, reducing the likelihood of foreclosure, Leno said. The bill also would let borrowers void foreclosures or obtain monetary damages if lenders fail to deal with them properly. “The kind of mistakes that are made should not be on the backs of the borrowers,” said Lisa Sitkin, attorney for Oakland-based Housing and Economic Rights Advocates, the bill’s sponsor.

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