Legislature(2009 - 2010)BELTZ 211
04/16/2009 03:45 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB60 | |
| HB108 | |
| HB177 | |
| HB175 | |
| HB222 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 60 | TELECONFERENCED | |
| + | HB 108 | TELECONFERENCED | |
| + | HB 177 | TELECONFERENCED | |
| + | HB 175 | TELECONFERENCED | |
| HB 222 | |||
CSHB 108(JUD) am-PROP. FORECLOSURE/EXECUTION/TRUST DEEDS
4:14:24 PM
CHAIR PASKVAN announced CSHB 108(JUD) am to be up for
consideration.
4:14:51 PM
JANE PIERSON, staff to Representative Ramras, sponsor of HB 108,
testified that this bill will clarify, simplify and modernize
non-judicial property foreclosures and hopefully reduce
litigation. It includes an Internet publication provision that
will make it more likely that third-party bidders will be
attracted. Third party bidders are desirable because they will
drive up auction prices, which can result in funds going back to
the borrower at the completion of the auction. The Internet
publishing requirements are borrower-friendly and only kick in
when there is an unavoidable foreclosure and all other efforts
to rescue the loan have failed.
Other changes to the bill make the process more efficient and
less litigation-prone. Some of the state foreclosure laws were
enacted before fax machines were invented, let alone the
Internet. Foreclosures are on the upswing - California,
Washington and Oregon are now buried in foreclosures and there
has been a rise in Alaska. Modernizing the statutes will help
reduce the huge impact that foreclosures can have on the
economy. The bill will make property foreclosure auctions more
open and accessible, which will benefit borrowers, lenders,
title insurers, individuals and even neighbors and
neighborhoods. HB 108 was drafted with the knowledge of the best
practices of 11 other states.
MS. PIERSON stated that currently banks are averaging a loss of
$20,000 per foreclosure; so hopefully this will add more people
into the foreclosure auctions. It will also clarify how
foreclosure proceeds will be divided up. It will assure that
foreclosure trustees are fiscally responsible by imposing
reasonable bond requirements and creating deadlines to deter
chilled bidders and unnecessary delays. It allows trustees to
nullify sales when mistakes are made that negatively impact the
integrity of the sale. It sets up procedures to follow involving
a deceased borrower, creates common sense rules to govern times
and methods for posting foreclosure properties; it creates
Internet publication procedures and allows acceptance of
foreclosure auction bids via e-mail, Internet and telephone -
for greater accessibility to auctions.
She pointed out a House floor amendment to get rid of a
provision that said that the sale had to happen two days before
the auction in order to be cured. She explained that language on
page 5, lines 20-23, was inadvertently left in and is now
superfluous since the sale can happen up to the time of sale. So
it needed to be removed.
SENATOR BUNDE asked if a particular precipitating event inspired
this legislation.
MS. PIERSON replied no.
4:20:10 PM
SENATOR THOMAS pointed out an inaccuracy on page 2, line 3, that
says "an inaccuracy in the street address may now be used to set
aside a sale if the legal description is correct." It seemed a
little unusual that if someone put the wrong street address in,
either on purpose or by mistake, that it shouldn't have some
impact on the sale.
MS. PIERSON said that language is currently in statute.
4:21:00 PM
ROBERT SCHMIDT, representing himself and his law firm, said HB
108 was originally written by his colleague and competitor,
Stephan Routh, and his associate, Bridget Olstrom, and that his
law firm ran a distant second in terms of volume of foreclosures
handled at 100 per year. He supported HB 108. It significantly
modernizes Alaska foreclosure laws. Among the items already
mentioned, it adds a five-day do-over period where the trustee
under a deed of trust may elect to undo the foreclosure sale and
return ownership of the property to the borrower, a great
protection to borrowers.
MR. SCHMIDT explained how he had grappled with Mr. Routh over
the necessity and extent of Internet publication, but he
supports the current version of HB 108, which codifies the
current practice of a newspaper running a print ad and
simultaneously running an Internet ad.
SENATOR BUNDE said with the increasing demise of newspapers, Mr.
Schmidt leans heavily toward them for advertising, but he wanted
to know if he had other suggestions.
MR. SCHMIDT agreed that newspapers are falling on hard times.
His concerns with the Internet publication provisions as
previously written were that the Internet website would have to
have 5,000 unique visitors per month and would have to have
senior management located in the state; it would also have to
have been used primarily to advertise real property
foreclosures. Under that definition only one website would
qualify and that is owned by Mr. Routh. His firm has a website,
too, but it advertises things other than foreclosures.
He explained that at one point the Internet publications
provisions were pulled and language saying if you buy a print ad
and it simultaneously runs an Internet ad was inserted. He is
skeptical that an Internet site should be required to get 5,000
unique visitors a month. In his opinion about 1 percent of the
Alaskan population is interested in buying foreclosure property;
he wonders whether the website would have to be just a
foreclosure website and whether or not it would have to be
located in Alaska. He concluded saying that the current language
is acceptable to him.
4:26:40 PM
CHAIR PASKVAN asked if he was aware of any opposition.
MR. SCHMIDT replied the original provisions for Internet
advertisement were of concern to several people within the
foreclosure related industry, and they have been appropriately
addressed. But he might change the 5,000 hits per month to a
more appropriate number, because it lacks connection to the
reality of foreclosure sales in Alaska where perhaps a dozen
people know and follow them.
SENATOR BUNDE said Alaska has prohibitions against special
interest legislation, and asked if that one firm is an issue.
MS. PIERSON replied yes; they have worked to make this language
more open.
SENATOR BUNDE asked why choose 5,000 hits?
MS. PIERSON replied that they picked that number because it is
not a lot of hits for an Internet website. It was a number so
that someone couldn't say they had met the provision by
publishing on some secure website somewhere. The sponsor would
have no problem with changing the number.
4:30:32 PM
STEPHEN ROUTH, representing himself, said he has been an
attorney in Anchorage for over 27 years and supported HB 108.
His primary focus is representing mortgage banks. He said this
bill was drafted in response to problems other states have, as
well as Alaska, with selling foreclosures. Certain laws hadn't
been updated and were causing litigation and problems for
borrowers, banks and title companies. It should have been done
long ago. Many letters of support are in their packets - without
qualification.
He explained that current state law mandates that foreclosures
are posted in a post office, which made sense 60 years ago when
people went to the post office to get news, but today it
doesn't. Also it's against federal law to publish estate notices
in a post office; federal employees tear them down. It does
other things like change the three-month period to 90 days
because it the number of days varies depending on which months
you are going through.
Things in the past have caused tremendous amounts of grief for
borrowers and their families, title companies and financial
institutions - things like what happens if the borrower is
deceased. Current law doesn't provide any guidance whatsoever on
foreclosures for deceased persons. HB 108 cleans that up as
well.
MR. ROUTH said they looked at ways to reduce foreclosure
litigation -how to give notice, how to post a property, what to
do if you can't get to the property because there is no house
there, and little things like that. On the Internet piece he
said that 5,000 hits a month in Internet-speak is literally
nothing. The last time he looked, the Anchorage Daily News (ADN)
was getting over 80,000 hits a day. He thought Mr. Smith's
website would qualify if he actually would count the number of
hits he has.
4:35:31 PM
He stated that things are often going wrong by the time you get
to a foreclosure, and if there is equity in the house, the
borrower should get it. Foreclosures need transparency; people
can investigate it and help the neighborhood increase in value.
If that process is hidden from everyone but the elite few, the
light of transparency is not shining on it.
4:38:08 PM
CHAIR PASKVAN closed public testimony.
4:38:18 PM
SENATOR THOMAS moved conceptual Amendment 1 to delete language
on page 5, lines 20-23. There were no objections and it was so
ordered.
SENATOR BUNDE said he thinks Internet advertising is a wise idea
and expands opportunity to share information, but he was
concerned about only one firm being able to provide the service
because of the 5,000 hit qualification. So, he asked if there
was interest in adopting another conceptual amendment to insert
language on page 3, line 12(E), to indicate that advertising on
the Internet where at least one of the websites has 5,000 hits.
CHAIR PASKVAN recalled that he read that the ADN doesn't qualify
because it is not an Internet site exclusively devoted to real
estate sales.
MS. PIERSON said that was one of the changes they worked very
hard to get.
SENATOR THOMAS said he didn't read that language to be
exclusive.
SENATOR BUNDE said this is talking about one website and he
wanted it to apply to websites plural at least one of which
would have 5,000 hits per month.
MS. PIERSON remarked that language in (A)-(F) on page 3, also
describes the qualifications for a website.
4:44:12 PM
SENATOR MEYER moved to report SCS CSHB 108(L&C) from committee
with individual recommendations and attached fiscal note(s).
There were no objections and it was so ordered.
At ease from 4:44 p.m. to 4:47 p.m.
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