Statehouses across America gave serious consideration to the idea of imposing moratoriums to help slow the pace of foreclosures this year.

None of the initiatives, including those in Minnesota, New York, Michigan, and California, have resulted in legislative action.

This year states made more progress on initiatives surrounding foreclosures and on unrelated issues, such as payday lending and financial literacy.

Still, observers expect the foreclosure issue to emerge again in many states next year, when millions more subprime mortgages are poised to reset at higher rates.

Several states, including Georgia, Pennsylvania, and Maryland, gave borrowers more time to work out modified payment plans with their mortgage lenders, and at least a dozen, including Texas, Arizona, and Florida, enacted laws to combat fraud by people claiming to be foreclosure consultants.

However, some lawmakers and industry participants see state-mandated foreclosure moratoriums as doing more harm than good.

In June, Gov. Tim Pawlenty of Minnesota, a Republican, vetoed a bill to freeze foreclosures in his state, saying it would make mortgages more expensive by forcing lenders to consider the "additional business risk" of nonpaying borrowers when making future loans.

"This will negatively impact the credit market in Minnesota by increasing interest rates for Minnesotans who are trying to refinance or purchase a new home," he wrote in a veto letter.

Heather Morton, an analyst at the National Conference of State Legislatures, said lawmakers held off imposing freezes this year to gauge whether other measures, such as increased funding for emergency assistance and loan modification programs, might stave off foreclosures.

"States were very active trying to help their constituents without making credit more difficult or shutting down the market altogether," Ms. Morton said.

For example, last month Florida announced agreements with lenders to freeze foreclosures voluntarily for a 45-day period, starting Dec. 1. Several companies, including Bank of America Corp., Citigroup Inc., Marshall & Ilsley Corp., and Webster Financial Corp., have their own voluntary moratoriums for a limited period.

However, modification programs appear to be yielding poor results. Comptroller of the Currency John Dugan noted this month at a conference for federal regulators that more than half the loans modified in the second quarter were 30 days past due within six months of being modified.

RealtyTrac.com, a Web site that tracks foreclosures nationwide, said foreclosures on U.S. properties increased 28% in the 12 months from November of last year to November of this year.

"As foreclosures continue to rise, I think states will continue to introduce bills on moratoriums," Ms. Morton said. "Whether or not they will pass, it's really hard to say."

Last month Gov. Arnold Schwarzenegger of California, a Republican, revived a bill to impose a 90-day moratorium on foreclosures there. The California Legislature has yet to act the bill, which has a number of opponents.

Kevin Gould, director of state government relations for the California Bankers Association, said his group believes freezing foreclosures in the state would make a bad situation worse. "If a moratorium is imposed and people stop making payments on their mortgages, then there will be a decline in property tax revenues, and it will add to blight."

Moreover, banks would not be able to recover their collateral if borrowers ceased payments, Mr. Gould said.

Steve Verdier, a lobbyist for the Independent Community Bankers of America, said other states may wait to see how the new Congress and President-elect Barack Obama address the issue next year. If federal lawmakers are slow to enact measures, the ICBA's members expect some states, such as Colorado, to take the lead, he said.

Mathew Street, the American Bankers Association's general counsel on state legislative issues, said it is notable that despite broad opposition among the states to an outright foreclosure moratorium, many states worked hard this year to stave off the foreclosure process.

In addition to extending the processing period and working to stem fraud, numerous states passed legislation to give borrowers emergency assistance, Mr. Street said. Connecticut had the broadest emergency program, which included emergency assistance to help borrowers facing foreclosure make a payment, help in refinancing their mortgages, and a loan program to help homeowners recover equity in their properties. Connecticut, California, and the city of Baltimore followed Massachusetts' 2007 lead and passed laws this year to protect tenants living in apartments whose landlords are facing foreclosure. The laws require the lenders to notify the tenants before the foreclosure process is complete and to give them ample notice before evicting them.

Next year all states will likely tackle another issue related to the housing crisis: whether to enact a version of the federal Safe Mortgage Licensing Act of 2008, which establishes minimum standards for the licensing of mortgage brokers and loan originators and mandates a national registry for them. All states must start regulating such professionals under these standards by January 2010 or allow the Department of Housing and Urban Development to do so.

The Conference of State Bank Supervisors helped craft the federal legislation and a model bill for state legislators to consider. John Ryan, executive vice president of legislation for the group, said states should strongly consider regulating mortgage brokers and loan originators themselves instead of letting HUD do so. "States have a key interest in maintaining some control in how financial activities are conducted within their states," he said. "Adding a new federal regulator could lead to more preemption" and would be unnecessary, "as HUD would be doing many of the same things that states are already doing."

Mr. Ryan said that 38 states already license individual mortgage brokers and loan originators; 12 license mortgage companies, but not their employees. However, states must either adopt the standards set forth in the federal law or establish stricter standards.

Though the mortgage crisis remained at center stage this year, states were able to tackle a number of other issues affecting the banking sector, including payday lending, credit card marketing on college campuses, and financial literacy. Last year Congress capped at 36% the annual percentage interest rate charged on payday loans for military personnel, and several states introduced bills to expand that cap to civilians. Oregon enacted such a law last year, and this year Ohio went further by enacting a law capping payday loan rates at 28%. Ms. Morton said more states are likely to consider instituting or lowering payday loan caps next year.

Two more states have put limits on card marketing on college campuses, bringing the number of states with some type of limit to seven. Maryland now requires colleges to draft policies for on-campus marketing, while Tennessee has made it illegal to "knowingly offer gifts or any other promotional incentives" to students to entice them to apply for a card.

All states require some sort of financial literacy education for public school students, but Ohio and Hawaii enacted measures this year to expand such programs for adults. Ohio created a fund to support adult financial education, and Hawaii is developing a financial literacy program that will be required for all state employees.

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