TN Bankers Now Blame Newspapers For Foreclosure Costs

I received yet another angry email from attorney for the Tennessee Bankers Association, Amy Smith, about their plan to make foreclosures easier in Tennessee - but it seems the blame has gone from my rogue and reckless blogging and is now aimed at that dirty, old, money-grubbing newspaper business. The original bill as approved is here.

I'll reprint her complete email below, but first I again must speak my mind.

I might buy some of the TBA's arguments if they had less blamethrowing.

And at least here on this blog, I've linked to the actual locations and names of those whose information I have used - however, the TBA's Counsel offers this with no names attached:

"We have sent response letters to every major newspaper in the state that has run distasteful, inaccurate and misleading articles and editorials about the proposed legislation. But no newspaper has printed our response."

Then NAME these publications. Call them out.

In fact, after explaining the legislation to one of the largest consumer groups with an active lobbying effort in the state (specifically that we intend to file amendments clarifying that the street address must be included, notices must be published two times rather than one, and that this will not change the foreclosure process at all), they are now fine with the legislation."


What group? They have a name don't they?

These claims that the TBA's decision to create and pass legislation which will reduce the amount of time it takes for foreclosure notices to be given to homeowners who have been falling behind is merely a way to protect and save homeowners money just doesn't make sense to me.

Cut out the number of mortgage policies in effect in TN which contractually call for 3 published notices - a protection within a mortgage agreement meant to protect lenders and borrowers and a quite common agreement -- how many would that leave? How old a mortgage or how poorly created would it be to lack such an agreement? Is that number the majority of mortgages held, a minority, half, twenty-five percent?

Yes, I know there is a push by some in the state legislature to remove all public notices from newspapers, with the claim that everyone can access the information via the internet. But we live in Tennessee, which is mostly rural and which has areas without the access to the internet and there are companion bills to allow government itself to start charging higher and higher fees to access "public information". Personally, I say require public notices to be published in print and online both. It's not like we can all assume that government and business always and only have the best interests of residents and voters in mind. If such were true, why vote? Why read any news? Everything is hunky dory!

And since the TBA's legislation has gotten so much negative response, they offer to change the notice reduction from three to one and now to two. So one less public notice - is that going to create any notable change in revenues or just make the process quicker?

Banks pay attorneys to get foreclosures rolling and get those title searches done and get those notices written up and if those costs have become too high, then maybe the banks are being overcharged?

The process in Tennessee can take up to 100 days, but 60 days is the average time from notice to sale of property.

So I am left with many questions about just what problem exactly this legislation is trying to address. And, below, as promised is the complete uncut email from TBA Counsel Amy Smith:

"Joe,

I appreciate you keeping me informed on your posts. In it you asked several questions about what I have done, or not done.

You mention being flattered by the email I sent to you. I assure you this is not the only communication TBA has sent in the past few weeks to critics of our bill. We have sent response letters to every major newspaper in the state that has run distasteful, inaccurate and misleading articles and editorials about the proposed legislation. But no newspaper has printed our response. I suppose the saying is true, “never pick a fight with someone who buys ink by the barrel”. The newspapers have nothing to gain by printing our letters (other than, of course, publishing the other side of their one-sided story) and everything to lose – most importantly, revenue.

This legislation will not speed up the process by which banks can foreclose nor it will make the process any easier. Despite what the articles say, the process is much longer than 21 days (on average, 100 days at a minimum) and requires multiple notices – not just the ones published in the newspapers. In fact, the notice in the newspaper is sent to the debtor and co-debtor(s) via certified mail, and this comes after at least three other notices sent over the previous 2-3 months.

This will in no way harm homeowners. In fact, it will only benefit them. As I mentioned, banks are not the ones responsible for paying the costs of foreclosures. Homeowners are. By reducing the cost of the ads, it will save homeowners a significant amount of money.

Unfortunately this message has gotten lost. And, the newspapers are to blame. They are not opposing this bill with everything they’ve got because they have the public interests at heart. They are opposing this bill because it will be a huge reduction in revenue for an industry already in trouble. Their revenues have declined in recent years as many more citizens are turning to online publications, and foreclosure notices are one of their biggest sources of revenue. Take that and couple it with the fact that this year other groups have been pushing to remove other legal notices entirely from the newspapers and post on the internet, and you’ve got the real reason there is so much opposition to this bill. Newspapers fear that even if the slightest reduction in public notices occurs (ie, REVENUE), then what is next??

It is a valid concern, but when you have to choose between newspaper revenue or homeowners foreclosure costs, who should win? It’s an easy question, but with all the misleading and inaccurate stories newspapers have been publishing lately, they’ve managed to portray this as a fight between newspapers/consumers and the banks who are one of the major causing of the housing crisis.

This brings me to another point I’d like to clarify. In your original post, you reference the recent regulatory “fixes” that were just issued for the 14 biggest mortgage firms. I do not deny this. But this is completely irrelevant to this issue at hand. Those banks are not behind this legislation. This legislation has come from the Tennessee banks, mainly the community banks, who know their customers and have good relationships with them and who are active in the community and do whatever it takes to keep a customer in his/her home rather than foreclose.

Banks have nothing to gain by pushing legislation that would speed up the process or cause any less bidders at the sale. This would only serve to reduce the amount of money a home is sold for in foreclosure, which would have only negative consequences for the bank.

I mentioned earlier that one of our biggest challenges is fighting a group that can “buy ink by the barrel”. They can write whatever they want, and trust me, they have, and we have no means to respond to their attacks as they refuse to publish our letters. That is why I responded to you article. Although TBA is fighting a nearly impossible battle in getting our message out there, we have not stopped trying. I spoke to another blogger for over an hour recently about the reasons we support this bill and what its real impact will have on the foreclosure process. I, and other at TBA, have also communicated with other groups who have been mislead by the newspapers.

In fact, after explaining the legislation to one of the largest consumer groups with an active lobbying effort in the state (specifically that we intend to file amendments clarifying that the street address must be included, notices must be published two times rather than one, and that this will not change the foreclosure process at all), they are now fine with the legislation.

Also, you argue that you did not put misinformation in your blog because you obtained this through another blog and newspapers articles. If you truly wanted to print the facts rather, not opinions, you would have done your own research. Everyone knows that there is always another side to the story. In your case, you chose to blog only about the newspapers side…the side that has only their revenue at stake in this."

And again, there it is - only newspapers have revenue at stake in this? Homeowners do. And so do banks.