Legislature(2007 - 2008)BELTZ 211
05/04/2007 01:30 PM Senate JUDICIARY
| Audio | Topic |
|---|---|
| Start | |
| HB19 | |
| SB145 | |
| SB18 | |
| SB157 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| = | HB 19 | ||
| = | SB 145 | ||
| = | SB 18 | ||
| = | SB 157 | ||
SB 18-PROPERTY FORECLOSURES AND EXECUTIONS
1:54:18 PM
CHAIR FRENCH announced the consideration of SB 18. Before the
committee was Version \V
JANE ALBERTS, Staff for Senator Bunde, Sponsor of SB 18,
explained that during the previous hearing the committee
painstakingly reviewed the first nine sections of the
foreclosure bill. She recapped that the bill was requested by
Stephan Routh who is an attorney who has lengthy experience with
foreclosures.
At ease 1:55:34 PM
1:57:48 PM
CHAIR FRENCH asked for a motion to adopt Version \N.
SENATOR WIELECHOWSKI motioned to adopt committee substitute (CS)
for SB 18, Version \N, labeled 25-LS0153\N, as the working
document before the committee. There being no objection, it was
so ordered.
CHAIR FRENCH asked Ms. Alberts how she would like to proceed.
MS. ALBERTS said she would prefer to start with Section 10 and
have Mr. Routh go through the remainder of the bill.
CHAIR FRENCH asked Mr. Routh if he would begin his discussion on
Section 10 of Version \N.
1:58:55 PM
Stephen Routh, Attorney with Routh Crabtree, APC, Anchorage,
said Section 10 is housekeeping. The first part deals with
priorities of distribution. There has been litigation in this
area partly because the statute isn't clear about what happens
when the beneficiary bids less than the full debt that's owed in
a foreclosure auction. He suggested that the best rule is for
the beneficiary to get all it is due. After that follow the line
of progression until the beneficiary is paid. If there's a
second liener they are paid next and so on down the line. The
borrower gets the remainder.
Section 10(g) gives breathing space after a foreclosure auction
to reduce litigation. When a sale has been held when it should
not have been the typical loser is the borrower. Under this
provision the trustee can unwind the sale and avoid litigation.
Section 10(h) talks about how to unwind a sale by giving the
money back and about how to renotice a sale thereafter.
2:01:33 PM
Section 11 allows attorneys for the beneficiaries to sign
substitutions of trustee. He said this is a good practice but
the statute is not clear that it is allowed.
Section 12 is about requirements for the attorney executing
documents on behalf of the beneficiary.
Section 13 is a new section that requires a bond by the trustee.
It provides assurance that trustees that handle large sums of
money are fiscally responsible.
CHAIR FRENCH asked how available surety bonds are and how much
they might cost.
MR. ROUTH said his research indicates the bonds would be
available and he believes the cost would be between $5,000 and
$10,000 per year.
CHAIR FRENCH asked if that means that a trustee would have an
entry level cost of between $5,000 and $10,000 a year.
MR. ROUTH said yes but a title agent would be exempt from the
requirement.
CHAIR FRENCH asked if this is a standard provision from a
uniform act.
MR. ROUTH said no; in his view it is a best practice but it's
not part of a uniform act.
CHAIR FRENCH questioned whether this wouldn't create a situation
where smaller trusts would have difficulty finding trustees
because it might be difficult to afford the bond.
MR. ROUTH said keep in mind this isn't per foreclosure auction,
it's per trustee per year.
CHAIR FRENCH asked if the idea is that the cost would be spread
out if a trustee were to handle many trusts.
MR. ROUTH said the general practice is for trustees to handle
many of these. A person who has a deed of trust with a small
balance would always have the option of going to a title
company. There is no bonding requirement for those because they
are licensed separately. There would always be a trustee to use
and he can't see that anyone would be driven out because of the
bond. They'd just have to show fiscal responsibility to continue
in that market, he stated.
CHAIR FRENCH said he'd flag that section and spend some time
researching the issue. He asked for an explanation of the
differences between Version \V and Version \N.
2:05:49 PM
MS. ALBERTS explained the following:
Section 2, page 2, line 23 should say "4 days" rather than "30
days."
Section 5, page 4, line 12 inserts ", except as provided in (e)
in this section." It is a suggestion from the attorney general's
office.
CHAIR FRENCH asked Mr. Routh if he had an explanation.
MR. ROUTH said he didn't know why the change was requested but
he's OK with it.
MS. ALBERTS continued:
Section 6 on page 5, line 28, is conforming language changing 3
months to 90 days.
Section 13, page 9, line 28, makes it clear that the person who
obtains the bond also has to give notice to the department.
MS. ALBERTS said the foregoing are the four changes between
Version \V and Version \N.
CHAIR FRENCH found no further questions or comments and
announced he would set SB 18 aside for the time being.
| Document Name | Date/Time | Subjects |
|---|