The Senate on Thursday rejected an effort to stave off home foreclosures by a vote of 51 to 45. It was an overwhelming defeat, with the bill’s backers falling 15 votes short — a quarter of the Democratic caucus — of the 60 needed to cut off debate and move to a final vote.

The death of the bankruptcy reform measure — which would have allowed a small number of homeowners who met strict conditions to renegotiate mortgages under bankruptcy protection — is a major tactical win for the banking industry. But allowing the foreclosure crisis to continue unabated may end up being a failed strategy for the financial sector.  Read more about the foreclosure bill…