Legislature(2007 - 2008)FAHRENKAMP 203

03/25/2008 01:30 PM JUDICIARY


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HJR 34 FEDERAL FUNDING FOR DNA TESTING TELECONFERENCED
Moved HJR 34 Out of Committee
+= HB 163 PROPERTY FORECLOSURES AND EXECUTIONS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE JUDICIARY STANDING COMMITTEE                                                                             
                         March 25, 2008                                                                                         
                           1:34 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                              
                                                                                                                                
Senator Hollis French, Chair                                                                                                    
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Bill Wielechowski                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Lesil McGuire                                                                                                           
Senator Gene Therriault                                                                                                         
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
HOUSE JOINT RESOLUTION NO. 34                                                                                                   
Urging the United States Congress to reauthorize the Debbie                                                                     
Smith DNA backlog grant program.                                                                                                
     MOVED HRJ 34 OUT OF COMMITTEE                                                                                              
                                                                                                                                
CS FOR HOUSE BILL NO. 163(JUD)                                                                                                  
"An Act relating to real property foreclosures, to the sale of                                                                  
property on execution, and to deeds of trust."                                                                                  
     HEARD AND HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HJR 34                                                                                                                  
SHORT TITLE: FEDERAL FUNDING FOR DNA TESTING                                                                                    
SPONSOR(s): REPRESENTATIVE(s) ROSES                                                                                             
                                                                                                                                
02/13/08       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/13/08       (H)       JUD                                                                                                    
02/22/08       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
02/22/08       (H)       Moved Out of Committee                                                                                 
02/22/08       (H)       MINUTE(JUD)                                                                                            
02/25/08       (H)       JUD RPT 5DP                                                                                            
02/25/08       (H)       DP: LYNN, COGHILL, SAMUELS, HOLMES,                                                                    
                         RAMRAS                                                                                                 
03/10/08       (H)       TRANSMITTED TO (S)                                                                                     
03/10/08       (H)       VERSION: HJR 34                                                                                        
03/12/08       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/12/08       (S)       JUD                                                                                                    
03/21/08       (S)       JUD AT 1:30 PM BELTZ 211                                                                               
03/21/08       (S)       -- MEETING CANCELED --                                                                                 
03/25/08       (S)       JUD AT 1:30 PM FAHRENKAMP 203                                                                          
                                                                                                                                
BILL: HB 163                                                                                                                  
SHORT TITLE: PROPERTY FORECLOSURES AND EXECUTIONS                                                                               
SPONSOR(s): REPRESENTATIVE(s) RAMRAS                                                                                            
                                                                                                                                
02/28/07       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/28/07       (H)       L&C, JUD                                                                                               
03/30/07       (H)       L&C AT 3:00 PM CAPITOL 17                                                                              
03/30/07       (H)       -- MEETING CANCELED --                                                                                 
04/20/07       (H)       L&C AT 3:00 PM CAPITOL 17                                                                              
04/20/07       (H)       Moved CSHB 163(L&C) Out of Committee                                                                   
04/20/07       (H)       MINUTE(L&C)                                                                                            
04/23/07       (H)       L&C RPT 1DP 4NR                                                                                        
04/23/07       (H)       DP: RAMRAS                                                                                             
04/23/07       (H)       NR: BUCH, LEDOUX, NEUMAN, OLSON                                                                        
04/27/07       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
04/27/07       (H)       Heard & Held                                                                                           
04/27/07       (H)       MINUTE(JUD)                                                                                            
04/30/07       (H)       CORRECTED L&C RPT CS(L&C) NT 1DP 4NR                                                                   
04/30/07       (H)       DP: RAMRAS                                                                                             
04/30/07       (H)       NR: BUCH, NEUMAN, LEDOUX, OLSON                                                                        
04/30/07       (H)       JUD AT 1:00 PM CAPITOL 120                                                                             
04/30/07       (H)       Moved CSHB 163(JUD) Out of Committee                                                                   
04/30/07       (H)       MINUTE(JUD)                                                                                            
05/01/07       (H)       JUD RPT CS(JUD) NT 3DP 4NR                                                                             
05/01/07       (H)       DP: GRUENBERG, LYNN, RAMRAS                                                                            
05/01/07       (H)       NR: COGHILL, DAHLSTROM, SAMUELS, HOLMES                                                                
05/05/07       (H)       TRANSMITTED TO (S)                                                                                     
05/05/07       (H)       VERSION: CSHB 163(JUD)                                                                                 
05/07/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
05/07/07       (S)       JUD, FIN                                                                                               
03/05/08       (S)       JUD AT 1:30 PM BELTZ 211                                                                               
03/05/08       (S)       Heard & Held                                                                                           
03/05/08       (S)       MINUTE(JUD)                                                                                            
03/21/08       (S)       JUD AT 1:30 PM BELTZ 211                                                                               
03/21/08       (S)       -- MEETING CANCELED --                                                                                 
03/25/08       (S)       JUD AT 1:30 PM FAHRENKAMP 203                                                                          
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CRYSTAL KOENEMAN, Staff                                                                                                         
  to Representative Bob Roses                                                                                                   
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Introduced HJR 34 on behalf of the sponsor.                                                              
                                                                                                                                
JANE PIERSON, Staff                                                                                                             
  to Representative Jay Ramras                                                                                                  
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Answered questions about HB 163.                                                                         
                                                                                                                                
STEPHEN ROUTH, Attorney at Law                                                                                                  
Routh Crabtree, APC                                                                                                             
Anchorage, AK                                                                                                                   
POSITION STATEMENT:  Provided prospective on HB 163.                                                                          
                                                                                                                                
DENNIS FENERTY, Attorney at Law                                                                                                 
Anchorage                                                                                                                       
POSITION STATEMENT:  Offered suggestions on HB 163.                                                                           
                                                                                                                                
MIKE PRICE, Owner                                                                                                               
Mat-Su Title Insurance Agency & Fidelity Title Insurance Agency                                                                 
POSITION STATEMENT:                                                                                                           
                                                                                                                                
REPRESENTATIVE JAY RAMRAS                                                                                                       
Alaska State Capitol                                                                                                            
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Sponsor of HB 163,                                                                                       
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  HOLLIS   FRENCH  called   the  Senate  Judiciary   Standing                                                            
Committee meeting to  order at 1:34:50 PM. Present  at the call to                                                            
order were Senators French, Huggins, and Wielechowski.                                                                          
                                                                                                                                
             HJR 34-FEDERAL FUNDING FOR DNA TESTING                                                                         
                                                                                                                                
CHAIR FRENCH announced the consideration of HJR 34.                                                                             
                                                                                                                                
1:35:14 PM                                                                                                                    
CRYSTAL KOENEMAN,  Staff to Representative  Bob Roses,  sponsor of                                                              
HJR 34,  said that  this resolution asks  Congress to  reenact the                                                              
Debbie Smith  DNA Backlog  Grant Program.  The program,  which was                                                              
originally  passed in 2004  and is  due to  expire in fiscal  year                                                              
2009,  ensures  that DNA  evidence  can  be  used to  convict  the                                                              
guilty and  free the  innocent. Alaska has  about 400  backlog DNA                                                              
cases and  reauthorizing the program  will ensure  continuation of                                                              
the grants so the backlog can be addressed.                                                                                     
                                                                                                                                
She  noted that  the packets  contain information  on the  federal                                                              
grants that Alaska  has obtained and what has been  done with that                                                              
money.                                                                                                                          
                                                                                                                                
CHAIR  FRENCH said  he  assumes  that this  would  cost the  state                                                              
nothing, and Ms.  Koeneman agreed. He asked if  the resolution has                                                              
a connection to the Innocence Project.                                                                                          
                                                                                                                                
MS.  KOENEMAN replied  there really  is no  connection. She  added                                                              
that according  to the Innocence  Project website, Alaska  has not                                                              
had any post-conviction DNA exonerations.                                                                                       
                                                                                                                                
1:37:32 PM                                                                                                                    
CHAIR  FRENCH said  he believes  that's accurate,  and noted  that                                                              
Mr.  Bill Oberly  has  been hired  to  head the  Alaska  Innocence                                                              
Project. He  asked how  much Alaska might  get if Congress  elects                                                              
to reauthorize the program.                                                                                                     
                                                                                                                                
MS. KOENEMAN  estimated that the  state has, on  average, received                                                              
about $160,000 a year.                                                                                                          
                                                                                                                                
CHAIR  FRENCH  noted  that  the grants  total  $151  million,  and                                                              
commented  that he'd  like Alaska  to get  a little  more of  that                                                              
money.                                                                                                                          
                                                                                                                                
Hearing and  seeing no one else  who wished to testify,  he closed                                                              
public testimony. Finding no discussion, he asked for a motion.                                                                 
                                                                                                                                
1:39:02 PM                                                                                                                    
SENATOR  HUGGINS motioned  to report  HJR 34  from committee  with                                                              
individual recommendations and attached fiscal note(s).                                                                         
                                                                                                                                
CHAIR FRENCH  announced that  without objection,  HJR 34  is moved                                                              
from the Senate Judiciary Committee.                                                                                            
                                                                                                                                
          HB 163-PROPERTY FORECLOSURES AND EXECUTIONS                                                                       
                                                                                                                                
CHAIR FRENCH announced the consideration of HB 163.                                                                             
                                                                                                                                
1:39:39 PM                                                                                                                    
JANE PIERSON,  Staff to  Representative Jay  Ramras, said  that HB
163, "An act  relating to real property foreclosures,  to the sale                                                              
of  property on  execution,  and  to deeds  of  trust.", has  been                                                              
changed  since   it  was  last   heard  in  this   committee.  She                                                              
highlighted  the   following  changes  between  Version   \O,  25-                                                              
LS0630\O, and Version \N, 25-LS0630\N:                                                                                          
                                                                                                                                
     Page  2, line  31  -  AS09.35.140(c)(3) was  amended  to                                                                   
     include  newspapers  that  have a  circulation  of  over                                                                   
     50,000  copies  of  each  issue  as  qualified  Internet                                                                   
     websites  to   which  non-foreclosure  notices   may  be                                                                   
     published.                                                                                                                 
                                                                                                                                
     Page   6,   line   31,   through   page   7,   line   3,                                                                   
     AS34.20.080(a)(1)  was amended so that the  trustee must                                                                   
     bring  an  action  under  AS22.10.020(g)   to  establish                                                                   
     procedures for accepting bids on the Internet.                                                                             
                                                                                                                                
     Page  10, lines  4-19,  adds  a new  section  34.20.125.                                                                   
     Trustee   bond   required.   All   references   to   the                                                                   
     Department   of   Commerce,  Community,   and   Economic                                                                   
     Development   (DCCED)   were    removed,   pursuant   to                                                                   
     discussions  with DCCED  and  Department  of Law  (DOL).                                                                   
     This is  a matter  of private  contract and the  bonding                                                                   
     requirements  will be  overseen by  the title  insurance                                                                   
     companies  that will not  issue title insurance  without                                                                   
     the bond in place.                                                                                                         
                                                                                                                                
CHAIR  FRENCH   questioned  how  many  newspaper   websites  would                                                              
qualify  under the  definition  that  requires a  distribution  of                                                              
50,000 copies for each issue.                                                                                                   
                                                                                                                                
MS PIERSON said  she believes that the Anchorage  Daily News (ADN)                                                              
and  the Alaska  Journal  of Commerce  (AJOC)  would qualify.  She                                                              
suggested that Stephen Routh could elaborate.                                                                                   
                                                                                                                                
1:42:45 PM                                                                                                                    
STEPHEN  ROUTH, Attorney  at  Law, Routh  Crabtree,  APC, said  he                                                              
only looked  at the  ADN on the  theory that  it was the  largest.                                                              
That  newspaper  would  qualify  because  it  has  a  daily  print                                                              
circulation  of about  80,000;  web visits  are  over 130,000  per                                                              
month. He didn't  look at circulations of the AJOC  or others, but                                                              
he would do so if the committee wanted more information.                                                                        
                                                                                                                                
CHAIR FRENCH  said if the idea is  to get the word out  to as many                                                              
people as  possible to return the  most money to the  lien holder,                                                              
he wonders  whether it wouldn't be  a better idea to  make certain                                                              
that local papers carry the notices.                                                                                            
                                                                                                                                
MR.  ROUTH   said  he  agrees   with  respect  to   local  printed                                                              
publications,  but  the problem  is  that the  statewide  Internet                                                              
publication  isn't  restricted to  a  particular  borough. If  any                                                              
print publication can  qualify to publish on the  Internet, a very                                                              
small  out-of-the-way   publication   could  carry  the   Internet                                                              
advertisements  for  a  large  urban  area.  Those  might  not  be                                                              
noticed  as  much.  For  that  reason,   having  some  circulation                                                              
threshold makes sense, he said.                                                                                                 
                                                                                                                                
1:45:25 PM                                                                                                                    
CHAIR FRENCH  asked if  his concern  is that  the Juneau  paper or                                                              
The   Tundra   Drums,   for   example,   might   carry   Anchorage                                                              
foreclosures.                                                                                                                   
                                                                                                                                
MR. ROUTH said yes.                                                                                                             
                                                                                                                                
CHAIR FRENCH  agreed that's to be  avoided, but a  Juneau resident                                                              
would probably  never think to look  on the ADN website  to see if                                                              
there was a foreclosure in his or her neighborhood.                                                                             
                                                                                                                                
MR. ROUTH pointed  out that a Juneau resident would  still be able                                                              
to  look in  the local  paper to  find foreclosures  in the  area.                                                              
Because of  the website  visit requirements,  search engines  will                                                              
pick up  foreclosure information for  any particular area.  But it                                                              
wouldn't ratchet the  other way, which is why it's  a good idea to                                                              
have some  threshold, to  make sure  that the  goal of  reaching a                                                              
wide audience is met.                                                                                                           
                                                                                                                                
CHAIR  FRENCH   said  it's   a  good   point  that  the   Internet                                                              
publication  augments  rather  than   supplants  newspaper  format                                                              
notification.                                                                                                                   
                                                                                                                                
1:47:03 PM                                                                                                                    
CHAIR FRENCH  turned to the second  change on page 6,  relating to                                                              
accepting bids  by telephone  and asked Ms.  Pierson or  Mr. Routh                                                              
to  further explain  what's  entailed in  establishing  procedures                                                              
ahead of time.                                                                                                                  
                                                                                                                                
MR. ROUTH  explained that this  change came  about as a  result of                                                              
the concern articulated  about the new process for  taking bids on                                                              
the   Internet.  The   trustee  will   establish  procedures   for                                                              
accepting  bids on  the Internet  that are  fair, accessible,  and                                                              
designed  to  result  in money  being  immediately  available  for                                                              
disbursement,  and   a  superior  court  judge  will   review  the                                                              
process. In response  to a question, he said  that AS22.10.020(g),                                                              
on page  6, line  31, is  the statutory  reference to a  procedure                                                              
set by a superior court judge.                                                                                                  
                                                                                                                                
CHAIR FRENCH asked  if bids are currently allowed  by telephone or                                                              
email.                                                                                                                          
                                                                                                                                
MR. ROUTH  replied they're  not expressly  allowed or  disallowed,                                                              
but  it's  common  practice  to use  both  in  foreclosures.  This                                                              
provides statutory blessing, he said.                                                                                           
                                                                                                                                
1:49:34 PM                                                                                                                    
CHAIR FRENCH  questioned why only  Internet bid procedures  are to                                                              
be reviewed  by the superior court;  telephone and email  are left                                                              
out.                                                                                                                            
                                                                                                                                
MR.  ROUTH  said he  believes  it's  because telephone  and  email                                                              
aren't  new  methods  and  wouldn't   be  viewed  as  suspect.  He                                                              
understood   the   committee   was   concerned   about   mandating                                                              
protection  of the  superior court  only on  the Internet  because                                                              
it's a new method.                                                                                                              
                                                                                                                                
1:51:14 PM                                                                                                                    
CHAIR FRENCH asked him to explain the changes made on page 10.                                                                  
                                                                                                                                
MR.  ROUTH  said  that  the Department  of  Law  and  the  sponsor                                                              
decided that  this is a  private bond matter  and there  isn't any                                                              
need for  DCEED to track and  keep the information.  He concurred.                                                              
Thus all  reference to the  Department of Commerce,  Community and                                                              
Economic Development  was dropped. The  intent and the  result are                                                              
the same; through  bonding, Alaskans are provided  some measure of                                                              
protection  from  unscrupulous  trustees  who might  abscond  with                                                              
funds.                                                                                                                          
                                                                                                                                
CHAIR  FRENCH  summarized  that  the new  Section  14  requires  a                                                              
trustee to first  obtain a surety bond that must  be terminable at                                                              
any time  by the surety.  In the event  that it's terminated,  the                                                              
person who  obtained the bond may  not act as a trustee  until the                                                              
person  obtains  another  bond.  He  noted  that  title  insurance                                                              
companies  and  title insurance  limited  producers  are  exempted                                                              
from the bonding requirement and asked what the latter is.                                                                      
                                                                                                                                
MR. ROUTH explained  that one is the underwriter and  the other is                                                              
the agent;  in Alaska there's a  mix. For example,  First American                                                              
Title is  the underwriter  that actually  provides the  insurance.                                                              
It  has licensed  agents,  some  of which  aren't  owned by  First                                                              
American,  but  those  agents  can   bind  the  underwriter.  This                                                              
provision  provides protection  for both  the underwriter  and the                                                              
agent.                                                                                                                          
                                                                                                                                
CHAIR  FRENCH asked  if  his analysis  indicated  that there's  no                                                              
reason for  oversight from  DCCED with respect  to keeping  a list                                                              
of who is bonded and who is not.                                                                                                
                                                                                                                                
MR. ROUTH replied that is correct.                                                                                              
                                                                                                                                
1:53:57 PM                                                                                                                    
SENATOR WIELECHOWSKI asked what it costs to get a $250,000 bond.                                                                
                                                                                                                                
MR. ROUTH estimated it's about $5,000.                                                                                          
                                                                                                                                
SENATOR WIELECHOWSKI  asked  what percentage  of trustees  are not                                                              
title insurance companies or title insurance limited producers.                                                                 
                                                                                                                                
MR. ROUTH  said that the  majority of people  who act  as trustees                                                              
in  Alaska  are non  title  insurance  related. He  surmised  that                                                              
close to a majority are entities from California.                                                                               
                                                                                                                                
SENATOR WIELECHOWSKI  said  he supports the  concept of  providing                                                              
protection, but he  questions the $5,000. He'd be  curious to hear                                                              
DCCED's perspective.                                                                                                            
                                                                                                                                
1:55:20 PM                                                                                                                    
CHAIR FRENCH asked  Ms. Pierson if this provision was  in the bill                                                              
when it passed the House.                                                                                                       
                                                                                                                                
MS. PIERSON  said it was; yesterday  DCCED, DOL, and  the division                                                              
of  insurance  made  the  decision   to  take  DCCED  out  of  the                                                              
equation.                                                                                                                       
                                                                                                                                
SENATOR   WIELECHOWSKI   said    he   doesn't   want   inadvertent                                                              
consequences for individuals who act as trustees.                                                                               
                                                                                                                                
1:56:10 PM                                                                                                                    
MR. ROUTH  said he understands the  concern about what  happens to                                                              
someone who  wants to do  this one or  two times, but  the reality                                                              
is that  it's fairly uncommon  because it's become  a professional                                                              
business.  His concern  is that  without  bonding requirements  or                                                              
other   indication   of   financial    stability,   borrowers   in                                                              
foreclosure   aren't   adequately  protected   from   unscrupulous                                                              
trustees. Now  if a  borrower wants to  pay off a  loan to  cure a                                                              
foreclosure,  the standard practice  is to hand  the money  to the                                                              
trustee.  If the trustee  decides to  run down  the road  with the                                                              
money, there's  nobody to  stop that. That's  the evil  this tries                                                              
to avoid, he said.                                                                                                              
                                                                                                                                
SENATOR  WIELECHOWSKI  asked  if   there's  been  a  problem  with                                                              
trustees committing fraud.                                                                                                      
                                                                                                                                
MR. ROUTH  replied it hasn't  happened in  Alaska yet, but  it has                                                              
happened in five or six Western states that he's aware of.                                                                      
                                                                                                                                
1:58:41 PM                                                                                                                    
DENNIS FENERTY,  Attorney at Law, Anchorage said  he's represented                                                              
lenders for  more than  20 years and  has done many  foreclosures.                                                              
He noted  that he commented on  the bill during the  work session,                                                              
and  he believes  the legislation  is valuable  and brings  Alaska                                                              
into   the  modern   age.  However,   Section   2,  which   amends                                                              
AS09.35.140  by adding new  subsections,  doesn't fix the  problem                                                              
that he  and others testified to  earlier. His concern  relates to                                                              
the  qualifications for  the hosts  of  the Internet  publication.                                                              
The publisher  of The  Alaska Journal  of Commerce indicated  that                                                              
he has a paid  subscription of 5,000 a week, which  means that the                                                              
AJOC  wouldn't qualify.  The ADN  would  qualify under  subsection                                                              
(c)(3), which  requires a newspaper  circulation of  50,000 copies                                                              
per  issue,  but it  might  not  meet the  test  under  subsection                                                              
(c)(5), which requires at least 5,000 website visits each month.                                                                
                                                                                                                                
MR.  FENERTY suggested  the  legislature  incorporate the  concept                                                              
that  already  applies  to  newspaper   advertizing.  That  is  to                                                              
authorize  any newspaper  to host  Internet  publications if  they                                                              
are a  newspaper of  general circulation  under AS09.35.140.  That                                                              
statute  establishes  the  standard  for a  newspaper  that  hosts                                                              
foreclosure  sales in  a  judicial district  where  the sale  will                                                              
occur. He  suggested that subsection  (c)(3) read as  follows: "be                                                              
used primarily  to advertise  real property  under foreclosure  or                                                              
be  operated   by  a  newspaper   of  general  circulation   under                                                              
AS09.35.140."   Under   subsection   (c)(5)  he   encouraged   the                                                              
committee  to  reduce  the  number of  websites  visits  to  1,000                                                              
because requiring 5,000  visits per month may exclude  the ADN. He                                                              
believes  that those  two changes  would  open the  host sites  to                                                              
competition from  the AJOC and others, while  still protecting the                                                              
concept  the committee  was concerned  about.  In other  respects,                                                              
this bill accomplishes good things, he said.                                                                                    
                                                                                                                                
2:04:16 PM                                                                                                                    
MR.  FENERTY,  addressing Senator  Wielechowski's  concerns  about                                                              
trustees,  explained that  under deed  of trust  the trustee  owes                                                              
duty to  the beneficiary  and the  borrower.  It isn't a  business                                                              
that the  legislature  should want  people to  get into easily  so                                                              
posting  a  bond is  prudent.  A  barrier  to  entry of  a  $5,000                                                              
premium for  a $250,000  bond shouldn't  concern the  legislature,                                                              
he said.                                                                                                                        
                                                                                                                                
He offered  to answer questions  and in conclusion said,  "I would                                                              
certainly hope  that we  carefully not create  a monopoly  to host                                                              
the…website advertizing."                                                                                                       
                                                                                                                                
CHAIR  FRENCH asked  him  to forward  his  written suggestions  on                                                              
Section 2 to his office.                                                                                                        
                                                                                                                                
2:05:35 PM                                                                                                                    
MIKE PRICE,  Owner, Mat-Su Title  Insurance Agency in  Wasilla and                                                              
Fidelity Title  Insurance Agency  in Anchorage,  said he's  been a                                                              
real  estate   attorney  since   1975  and  he's   conducted  many                                                              
foreclosures  in  his years  of  practice.  He, too,  opposes  the                                                              
Internet  provisions  in  Section  2 of  the  current  draft.  The                                                              
foreclosures  he  does  on  behalf  of  the  title  companies  are                                                              
advertized  in  papers of  general  circulation  as defined  by  a                                                              
circulation of  either 500  papers or 10  percent of  the judicial                                                              
district  in which  the paper is  located. If  the legislature  is                                                              
going  to  encourage   Internet  advertizing,  he   would  suggest                                                              
accepting the same  language as is used for  written publications.                                                              
With  respect to  the  5,000 visits  per  month requirement  under                                                              
subsection (c)(5),  he would suggest  the committee  not establish                                                              
an  arbitrary  number.   If  the  newspaper  is   one  of  general                                                              
circulation,  then   subsection  (c)(5)   on  page  3,   could  be                                                              
eliminated altogether.                                                                                                          
                                                                                                                                
MR. PRICE referred  to page 4, lines  5-6, and noted that  the new                                                              
phrase  means  that the  lender  only  has  to  accept a  cure  of                                                              
default  up to two  days before  the sale,  which is  inconsistent                                                              
with  at least  100,000  existing  deeds of  trust  in the  state.                                                              
Those  contracts   between  the   borrower  and  the   beneficiary                                                              
basically  say that  the  borrower can  cure  any time  up to  the                                                              
moment of  sale. He  encouraged the  committee to  look at  the ex                                                              
post  facto  implications  of  changing  up to  100,000  deeds  of                                                              
trusts. And,  he said,  if it  is the  legislature's intent  to do                                                              
this,  he  would encourage  establishing  legislative  history  to                                                              
guide the  court in  the inevitably court  challenge. Most  of the                                                              
bill  is good,  but those  two provisions  are unconscionable  and                                                              
they should be removed, he said.                                                                                                
                                                                                                                                
2:12:29 PM                                                                                                                    
CHAIR  FRENCH   thanked  Mr.   Price  and   said  that   in  these                                                              
specialized areas  of law, it's particularly helpful  to hear from                                                              
people who do this for a living.                                                                                                
                                                                                                                                
SENATOR WIELECHOWSKI  said that  Mr. Price  made good  points, and                                                              
he  wouldn't object  to  removing  the two  days  before the  sale                                                              
provision.  The other  issue is  an interesting  debate, he  said.                                                              
Limiting advertisement  to one or two Internet sites  might not be                                                              
the best  answer, but if a  large number of Internet  websites are                                                              
allowed,  the sales  could  be buried  and  be  very difficult  to                                                              
find. There's a balance there somewhere, he said.                                                                               
                                                                                                                                
2:14:04 PM                                                                                                                    
CHAIR FRENCH  agreed that the Internet  section of the  bill needs                                                              
further work.  He noted  that the two  days before sale  provision                                                              
was in  the bill when it  passed the House;  he circled it  at the                                                              
last  hearing but  there was  no discussion.  The testimony  today                                                              
indicates that  it may be contrary  to a large number  of deeds of                                                              
trust. He'll  discuss with  legislative legal  the idea  of adding                                                              
some  qualifying language  to keep  the  provision as  long as  it                                                              
doesn't  conflict  with  the  contract   the  borrower  signed  to                                                              
purchase the property.                                                                                                          
                                                                                                                                
SENATOR WIELECHOWSKI  offered the  perspective that if  someone is                                                              
potentially  losing  their house,  they  should  be able  to  cure                                                              
right up  right up  to the time  of the sale.  That seems  fair to                                                              
me, he said.                                                                                                                    
                                                                                                                                
2:15:38 PM                                                                                                                    
SENATOR HUGGINS  said he  agrees but  he'd like  to hear  what the                                                              
debate was in the other body.                                                                                                   
                                                                                                                                
MS.  PIERSON explained  that  the original  draft  said five  days                                                              
prior to  the sale.  The House Judiciary  Committee changed  it to                                                              
two days in the  belief that it struck a balance  between the cost                                                              
that would  be incurred and litigation  that may arise  if left up                                                              
to  the  day   of  the  sale.  After  listening   to  Mr.  Price's                                                              
testimony, she acknowledged that an amendment may be in order.                                                                  
                                                                                                                                
CHAIR FRENCH said  it's clear that if some period  of time to cure                                                              
remains in the  bill, some modification will be  necessary to make                                                              
sure that  it's subsidiary  to any language  in existing  deeds of                                                              
trust. He recognized that the sponsor had joined the meeting.                                                                   
                                                                                                                                
2:17:26 PM                                                                                                                    
REPRESENTATIVE JAY  RAMRAS, Sponsor of HB 163,  said he's amenable                                                              
to  the  suggested  changes.  He   is  concerned  about  potential                                                              
foreclosures  in Fairbanks  driven by  an inability  to service  a                                                              
mortgage  and the roster  of skyrocketing  utilities. Although  he                                                              
uses  banks, he's  mindful  that lenders  are  more interested  in                                                              
their being made  whole when a homeowner is distressed  and has to                                                              
surrender  their  home.  He  is pleased  that  this  committee  is                                                              
interested  in  protecting  a homeowner's  remaining  equity.  "We                                                              
appreciate the improvements  and the amendments that  are going to                                                              
be  offered  by Senate  judiciary  at  the appropriate  time,"  he                                                              
said.                                                                                                                           
                                                                                                                                
2:19:04 PM                                                                                                                    
SENATOR  WIELECHOWSKI   recapped  his  musing  about   the  proper                                                              
tension  between advertizing  in  one publication  that reaches  a                                                              
large  number  of  people versus  smaller  local  advertizing.  He                                                              
asked the  sponsor to  provide the  committee with information  on                                                              
how other states deal with that problem.                                                                                        
                                                                                                                                
REPRESENTATIVE RAMRAS  said he supports  the notion of  having two                                                              
buyers rather than one.                                                                                                         
                                                                                                                                
MS.  PIERSON  added  that there  are  provisions  requiring  local                                                              
posting  one of  which  is  to advertize  the  sale  in the  local                                                              
newspaper. The  Internet provision is  really an expansion  to get                                                              
more bidders; it doesn't do away with the local provisions.                                                                     
                                                                                                                                
2:21:24 PM                                                                                                                    
MR. ROUTH  relayed that the  ADN in a  previous month  had 123,716                                                              
visits so  it would  qualify, and the  Alaska Journal  of Commerce                                                              
would  probably qualify  as well.  He urged the  committee  not to                                                              
say  that  if a  publication  is  qualified  for print  it's  also                                                              
qualified for the  Internet because there wouldn't  necessarily be                                                              
wide  publicity   to  attract  bidders.  It'd  be   a  mistake  to                                                              
advertize  property that's  for sale  in Juneau  primarily in  the                                                              
Tundra Times. That  would be a disservice to  everyone involved in                                                              
the process. The  bottom line is exposure; that's  why real estate                                                              
companies buy full page ads in large newspapers, he said.                                                                       
                                                                                                                                
CHAIR FRENCH  said everyone  shares the same  goal; it's  a matter                                                              
of finding the best way to do that. He held HB 163 in committee.                                                                
                                                                                                                                
There  being no  further business  to come  before the  committee,                                                              
Chair  French adjourned  the Senate  Judiciary Standing  Committee                                                              
meeting at 2:23:02 PM.                                                                                                        
                                                                                                                                

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