California would become the first state to write into law much of the national mortgage settlement negotiated this year with the nation's top five banks, and expand it to all lenders, under wide-ranging legislation state lawmakers approved Monday.

Majority Democrats sent the homeowner protection package to Gov. Jerry Brown despite opposition from business and lending organizations and most Republican legislators.

The Assembly approved the legislation on a 53-25 vote, and the Senate followed by voting 25-13.

The legislation would require large lenders to provide a single point of contact for homeowners who want to discuss loan modifications. It would prohibit lenders from foreclosing while the lenders consider homeowners' request for alternatives to foreclosure. And it would let California homeowners sue lenders to stop foreclosures or seek monetary damages if the lender violates state law.

Regulators are examining whether Morgan Stanley, the investment bank that shepherded Facebook through its highly publicized stock offering last week, selectively informed clients of an analyst's negative report about the company before the stock started trading.

Rick Ketchum, the head of the Financial Industry Regulatory Authority, the self-policing body for the securities industry, said Tuesday that the question is "a matter of regulatory concern" for his organization and the Securities and Exchange Commission.

The top securities regulator for Massachusetts, William Galvin, said he had subpoenaed Morgan Stanley. Galvin said his office is investigating whether Morgan Stanley divulged to only some clients that one of its analysts had cut his revenue estimates for Facebook before the stock hit the market on Friday.

The bank said late Tuesday that it "followed the same procedures for the Facebook offering that it follows for all IPOs," referring to initial public offerings of stock. It said that its procedures complied with regulations.

The questions about the role played by Morgan Stanley, the lead underwriter for the deal, add to the confusion surrounding Facebook's IPO. In the most hotly anticipated stock debut in years, the offering raised $16 billion for the social networking company, valuing it at $104 billion.

Fixed mortgage rates were mostly unchanged this week as credit markets showed little reaction to Washington's impasse over raising the federal government's borrowing limit.

Freddie Mac reported Thursday that the average rate on the 30-year fixed loan ticked up to 4.55 percent from 4.52 percent a week ago. That's slightly above this year's low of 4.49 percent.

The average rate on the 15-year fixed loan was unchanged at 3.66 percent, just above the yearly low of 3.65 percent.

Mortgage rates typically track the yield on the 10-year Treasury note. Yields have been stable, even though Congress and the Obama administration are days away from a potential default on the government's debt.

Low mortgage rates and depressed home prices have done little to revive the struggling housing market. Many people simply can't take advantage of the historically low rates because of tighter lending standards and bigger required down payments.

The number of homes taken back by lenders in the first half of this year fell 30 percent compared with the same 2010 period, the result of delays in foreclosure processing that threaten to stall a U.S. housing recovery.

Banks seized 421,212 homes in the first six months of the year, down from 529,633 between January and June last year, foreclosure listing firm RealtyTrac Inc. said Thursday.

The decline reflects lenders taking longer to move against homeowners who have fallen behind on their mortgage payments. The banks are working through foreclosure documentation problems that first surfaced last fall and an ensuing logjam in some state courts. Lenders also have put off on taking action against delinquent borrowers as U.S. home sales have slowed this year.

As the processing delays mount, however, so has the backlog of potential foreclosures -- homes that otherwise would have been repossessed by lenders this year.

RealtyTrac estimates that 1 million foreclosure-related notices that should have been filed by banks this year will be pushed to next year. The filings include notices for defaults, scheduled home auctions and home repossessions -- warnings that can lead to a home eventually being lost to foreclosure.

The Supreme Court has refused to get involved in a long-running dispute on the continued existence of the Yankton Sioux Tribe and the extent of its lands in South Dakota.

The justices on Monday let stand several rulings involving the tribe, including an appeals court decision saying the reservation covers more than 30,000 acres, which is mostly land the federal government holds in trust for the tribe and individual tribal members.

The high court also rejected an appeal from the tribe to block the transfer of two federal recreation areas along the Missouri River to the state of South Dakota.

The cases are Daugaard v. Yankton Sioux Tribe, 10-929; Southern Missouri Recycling v. Yankton Sioux Tribe, 10-931; Hein v. Yankton Sioux Tribe, 10-932; and Yankton Sioux Tribe v. Daugaard, 10-1058.

Before Donald Trump sold the idea of a possible 2012 presidential bid, the bombastic real estate mogul peddled the American dream at a place called Trump University. He promised consumers the golden opportunity to be "my next apprentice" and learn "insider" secrets of real estate.

But a lawsuit filed in U.S. District Court in San Diego claims that the possible GOP presidential candidate's courses instead delivered expensive "infomercials" disguised as educational classes that preyed on vulnerable Americans in "troubled economic times."

George Sorial, assistant general counsel for the Trump Organization, told The Chronicle this week that the allegations contained in the suit are "completely ridiculous," adding that Trump University stands "100 percent behind any course we offered."

Sorial dismissed the lawsuit as an effort by two former students and their attorneys "looking to make a quick buck" from the celebrity businessman.

"There wouldn't even be a lawsuit if the Trump name weren't attached to it," he said.

But Tarla Makaeff, 37, a former fashion designer and marketer from Corona del Mar (Orange County), told The Chronicle in an interview this week that Trump's "university" was hardly worthy of the name.

The federal government has sued Deutsche Bank. It alleges the bank committed mortgage fraud by repeatedly lying so that it could join a government program that insured mortgages.

The Manhattan lawsuit seeks to recover some of the hundreds of millions of dollars in insurance claims that the government has had to pay when homeowners defaulted on their mortgages. The lawsuit also asked for punitive damages.

According to the lawsuit, Deutsche Bank profited from the resale of the government-insured mortgages.

The government says Deutsche Bank recklessly selected mortgages that violated the rules of the program. It says the bank ignored whether borrowers could afford their mortgage payments.

Deutsche Bank says in a statement that it will fight the lawsuit. It calls the allegations "unreasonable and unfair."