HB 163 - PROPERTY FORECLOSURES AND EXECUTIONS 1:08:26 PM CHAIR RAMRAS announced that the first order of business would be HOUSE BILL NO. 163, "An Act relating to real property foreclosures, executions, and deeds of trust." [Before the committee was the proposed committee substitute (CS) for HB 163, Version 25-LS0630\K, Bannister, 4/24/07, which had been adopted as the work draft on 4/27/07.] CHAIR RAMRAS referred members to page 3, lines 25-26. 1:11:25 PM STEPHAN ROUTH, Attorney at Law, Routh & Crabtree, APC, stated that what happens at a foreclosure sale is reinstatement, wherein the owners pay the delinquent amounts, but the reinstatement should have happened prior to the auction. Other states have addressed the problems associated with last minute reinstatements by moving back the deadline for reinstatement; for example, Washington has set the reinstatement deadline at 10 days prior to the auction, which in his view, he remarked, was too long, though it might be acceptable if the deadline were left at 5 days, or perhaps even reduced to 2 or 3 days. He said another reason he felt the reinstatement should occur prior to the auction is to maximize bidding for the benefit of the borrower, and reiterated his belief that reinstatements should not be considered at the time of the auction. STEPHAN ROUTH said he calculated that if the reinstatement date were left at 5 days, as current law allows, then the minimum time to complete foreclosure in Alaska would be 120 days, with 90 days for foreclosure, and 30 days after default on the loan. He explained that the timeframe for a foreclosure does not include the three-month delinquency period that institutions typically allow prior to initiating a foreclosure process, which makes the standard timeframe for the borrower to reinstate actually closer to six months. Under current law, the parties have 5 days prior to the sale to reinstate, and in about 97.3 percent of the time the reinstatement time is approximately a total of 175 days. He said that he would feel satisfied if the date were moved away from the sale time, which is the auction date. REPRESENTATIVE HOLMES asked whether the owner often makes payment of the foreclosure costs within 48 hours of the auction time. STEPHAN ROUTH responded that payment close to the date of sale does not often happen, but when it does occur it creates big problems. REPRESENTATIVE HOLMES asked whether a two-day deadline would be amenable to Mr. Routh. STEPHAN ROUTH concurred that a two-day deadline would be amenable. REPRESENTATIVE GRUENBERG indicated that he supported a two-day deadline. CHAIR RAMRAS, after ascertaining that no one else wished to testify, closed public testimony on HB 163. 1:15:09 PM REPRESENTATIVE HOLMES made a motion to adopt a Conceptual Amendment 1, to replace "five" with "two" on page 3, line 25. There being no objection, Conceptual Amendment 1 was adopted. REPRESENTATIVE DAHLSTROM moved to report the proposed CS for HB 163, Version 25-LS0630\K, Bannister, 4/24/07, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 163(JUD) was reported from the House Judiciary Standing Committee.