I've offered several posts on this proposed legislation - and the views of those who crafted it, the Tennessee Bankers Association.
And even as the debate verges on a giant round of "did/did not" blamethrowing, there's a simple question which should be applied to most any legislation - What problem does it solve?
While the TBA maintains the cost of publishing public notices falls on delinquent mortgage holders, others in the field claim the cost falls on the banks. Makes sense, since if a mortgage can't be paid, they likely can't pay extra fees associated with foreclosure. Another claim is that newspapers are the ones making big bucks from notice publications. So what's the real target of this legislation?
It's a shame the press and the banks can't resolve this issue - but do we need changes to state law crafted to provide homeowners protection?
And the state legislature has some fairly useless debate on this topic, while ignoring the clear conflict of interest of the legislators pushing this bill. As Tom Humphrey writes:
"Rep. Jon Lundberg, R-Bristol, said the legal notices under current law amount to "government-mandated subsidies of newspapers," which receive more advertising revenue with more frequent publication and longer descriptions. He also said legislators hesitant to approve the bill are "scared of newspapers."
"I ain't scared," replied Rep. Gary Moore, D-Joelton, responding to Lundberg's remarks during a House Judiciary Committee hearing.
"Both legislators sponsoring the bill have ties to banks. Matlock served on a bank board of directors until four years ago, he said. Matlock also lists bank holdings on a financial statement filed with the state, though he said all but "less than $1,000 worth" has been sold since he left the BB&T bank board.
Sen. Jack Johnson, R-College Grove, who is Senate sponsor of the bill, has worked for Pinnacle National Bank. The current president of the TBA, House Democratic Leader Craig Fitzhugh of Ripley, is a co-sponsor of the bill."
"Eric Barnes, publisher of the Memphis Daily News, said a review of 50,000 notices showed the average cost as $212 each, or $636 for three publications.
Baker, the Nashville attorney, said that, as a practical matter, banks wind up paying the ad costs in all but "one in a hundred" cases simply because the homeowner has no money or is in bankruptcy.
And Henry Hildebrand, a bankruptcy trustee in Middle Tennessee, told legislators that he has seen "hundreds" of cases over the past 20 years of legally defective foreclosure moves by banks that were never detected until they reached U.S. Bankruptcy Court. He opposed the bill for reducing one of the few safeguards now benefiting homeowners in Tennessee."
As noted at KnoxViews today, many large national banks are mired in controversy over fraudulent mortgage practices.
In Hawaii, which like Tennessee, has non-judicial foreclosure laws, the state has totally revamped existing laws to give more protection and more time to struggling homeowners.
Tennessee legislators take up their proposal again this week.