04/03/2009 01:00 PM House JUDICIARY

HB 108 - PROPERTY FORECLOSURES AND EXECUTIONS                                                                                 
                                                                                                                                
1:11:12 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS announced that the  first order of business would be                                                               
HOUSE  BILL   NO.  108,  "An   Act  relating  to   real  property                                                               
foreclosures, to the sale of  property on execution, and to deeds                                                               
of trust."  [Before the  committee was CSHB 108(L&C), and adopted                                                               
as  the  work  draft  on   3/30/09  was  the  proposed  committee                                                               
substitute  (CS)  for  HB 108,  Version  26-LS0318\P,  Bannister,                                                               
3/26/09.]                                                                                                                       
                                                                                                                                
1:11:28 PM                                                                                                                    
                                                                                                                                
JANE W.  PIERSON, Staff, Representative Jay  Ramras, Alaska State                                                               
Legislature,  on behalf  of the  sponsor, Representative  Ramras,                                                               
turned  the committee's  attention  to Amendment  1, labeled  26-                                                               
LS0318\P.2, Bannister, 4/2/09, which read:                                                                                      
                                                                                                                                
     Page 2, lines 27 - 29:                                                                                                     
          Delete "The notice must be published for at least                                                                     
     30  days, including  at least  10 of  the last  15 days                                                                    
     before  the actual  date of  the sale.   Giving  notice                                                                    
     under this  subsection is not required  unless there is                                                                    
     an Internet  website that qualifies  under (c)  of this                                                                    
     section."                                                                                                                  
          Insert "Publication of the notice must begin not                                                                      
     later than the  first day that the  notice is published                                                                    
     under  (a)(2)  of this  section  and  must continue  at                                                                    
     least  through the  day  in the  fourth  week that  the                                                                    
     notice is published under (a)(2) of this section."                                                                         
                                                                                                                                
     Page 4, line 21, following "AS 34.20.080(e)":                                                                          
          Insert ", unless the trust deed was entered into                                                                  
     before the effective date of  this Act and provides for                                                                
     a different time to cure the default before the sale"                                                                  
                                                                                                                                
     Page 5, lines 15 - 21:                                                                                                     
          Delete all material and insert:                                                                                       
               "(1)  payment of the sum then in default,                                                                        
     other than the principal that  would not then be due if                                                                    
     default  had not  occurred,  and  foreclosure fees  and                                                                    
     costs actually incurred by the beneficiary and trustee                                                                     
     due to the default is made                                                                                                 
               (A)  at any time up to two days before the                                                                       
     sale date stated in the notice of default, or two days                                                                     
     before a date to which the sale is postponed; or                                                                           
               (B)  if the trust deed was entered into                                                                          
     before the effective date of  this Act and provides for                                                                    
     a  different time  than the  time described  in (A)  of                                                                    
     this  paragraph to  cure the  default before  the sale,                                                                    
     within the time provided in the trust deed; and"                                                                           
                                                                                                                                
MS. PIERSON  explained that Amendment  1 does three things:   the                                                               
portion  proposing to  alter page  2, lines  27-29, conforms  the                                                               
language regarding  Internet publication  with that  of newspaper                                                               
publication;  the portion  proposing to  alter page  4, line  21,                                                               
cures a  potential problem that  could arise  if a deed  of trust                                                               
sets out a time period different  from statute in which to cure a                                                               
default; and the portion proposing  to alter page 5, lines 15-21,                                                               
describes what information  regarding how to cure  a default must                                                               
be provided in the notice of default.                                                                                           
                                                                                                                                
1:12:55 PM                                                                                                                    
                                                                                                                                
CHAIR RAMRAS made a motion to adopt Amendment 1.                                                                                
                                                                                                                                
REPRESENTATIVE GRUENBERG objected for the purpose of discussion.                                                                
                                                                                                                                
1:13:20 PM                                                                                                                    
                                                                                                                                
ROBERT H. SCHMIDT,  Attorney at Law, Groh  Eggers, LLC, indicated                                                               
that  he  would  be  amenable  to Amendment  1  as  long  as  the                                                               
committee  clarifies  that  the   Internet  publication  and  the                                                               
written  publication are  intended to  be "coextensive"  and that                                                               
the Internet publication  is not required to be every  day.  This                                                               
clarification  is  necessary,  he  opined,  because  the  written                                                               
publication is  only required to be  once a week for  four weeks,                                                               
and so  to require the Internet  publication to be every  day for                                                               
four weeks would greatly increase the cost of publication.                                                                      
                                                                                                                                
MR.  SCHMIDT,   noting  that  he  strongly   supports  the  bill,                                                               
expressed  concern  regarding   the  unintended  consequences  of                                                               
mandating [that the payment to cure  the default be made at least                                                               
two days prior to the sale  date stated in the notice of default,                                                               
or at  least two  days prior  to the date  the sale  is postponed                                                               
to].   Currently,  one  can cure  a default  and  thereby stop  a                                                               
foreclosure  sale  anytime  before   the  sale;  additionally,  a                                                               
trustee  may  elect  to  refuse  a  cure  and  proceed  with  the                                                               
foreclosure  sale  if default  has  occurred  two or  more  times                                                               
previously.  He  suggested that Section 4 of the  bill be amended                                                               
such that  the proposed new  language on  page 4, line  17, would                                                               
read in part, ", and, if  the beneficiary under the trust deed so                                                           
elects, (9) a  statement described".  He offered  his belief that                                                           
this change would provide the  beneficiary with the discretion to                                                               
waive what he called the "two-day  rule."  He also suggested that                                                               
Section 6 of  the bill be amended such that  the language on page                                                               
5, lines 12,  would read in part, "If the  beneficiary so elects,                                                               
a statement required by (b)(9) of this section may state".                                                                      
                                                                                                                                
REPRESENTATIVE GRUENBERG  posited that the change  Mr. Schmidt is                                                               
suggesting to  page 4, line 17,  should instead read in  part, ",                                                           
and (9) if the beneficiary  so elects, the statement described in                                                           
(e)  of  this  section  describing   conditions  for  curing  the                                                           
default".                                                                                                                   
                                                                                                                                
MR. SCHMIDT  concurred.  He  then suggested that the  language on                                                               
page  5,  line 12,  instead  be  changed to  read  in  part:   "A                                                               
statement  allowed by  (b)(9) of  this  section may  state".   In                                                               
response  to  a  question,  he said,  "My  intention  with  these                                                               
changes  is  to  make  it   discretionary  on  the  part  of  the                                                               
beneficiary whether they want to  cut off the borrower's right to                                                               
stop the foreclosure  to curing two days out."   In response to a                                                               
further question, he  suggested that Amendment 1  be amended such                                                               
that  the  printed  publication  requirements  and  the  Internet                                                               
publication requirements  are harmonized; specifically,  that the                                                               
new language  Amendment 1 is  proposing to  add to page  2, lines                                                               
27-29, instead read,  "Publication of the notice  must occur four                                                               
times, once  a week for four  successive weeks".  He  opined that                                                               
the language currently proposed via  Amendment 1 to page 2, lines                                                               
27-29,  is   ambiguous  with  regard  to   whether  the  Internet                                                               
publication must occur daily even  though the written publication                                                               
needn't, and that his suggested language  - which can be found on                                                               
page 2, line 2, of Version P - would make the bill stronger.                                                                    
                                                                                                                                
1:23:39 PM                                                                                                                    
                                                                                                                                
STEPHEN ROUTH,  Attorney at Law,  Routh Crabtree,  apc, expressed                                                               
satisfaction with  the language  of Amendment  1 as  is, offering                                                               
his understanding  that Internet  publications are free,  and his                                                               
belief  that  no  bank  would   turn  down  a  cure  for  default                                                               
regardless of how close it occurs  to the date of the foreclosure                                                               
sale.                                                                                                                           
                                                                                                                                
REPRESENTATIVE GRUENBERG removed his objection to Amendment 1.                                                                  
                                                                                                                                
CHAIR  RAMRAS,  noting that  there  were  no further  objections,                                                               
announced that Amendment 1 was adopted.                                                                                         
                                                                                                                                
1:27:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE DAHLSTROM  moved to report the  proposed committee                                                               
substitute  (CS)  for  HB 108,  Version  26-LS0318\P,  Bannister,                                                               
3/26/09,   as  amended,   out   of   committee  with   individual                                                               
recommendations and  the accompanying fiscal notes.   There being                                                               
no  objection,   CSHB  108(JUD)  was  reported   from  the  House                                                               
Judiciary Standing Committee.