NASHVILLE, Tenn. (AP) — The House has reluctantly agreed to restore the required frequency of foreclosure notices published in Tennessee newspapers to three times.
The chamber had originally approved Rep. Jimmy Matlock’s measure (HB1920) to reduce the requirement to two public notices, but the Senate refused to go along.
The Lenoir City Republican said Saturday that he regrets the change, but that he agreed in the interest of getting the measure passed this year. The chamber voted 85-2 to approve the changes.
The final version of the bill would still trim technical information required in the notices, thereby cutting about 25 percent of the length.
The bill now heads for the governor’s consideration.
The House voted 72-19 today to scale back on publication of foreclosure notices in newspapers as urged by the Tennessee Bankers Association.
The bill, HB1920, will reduce from three to two the number of times a foreclosure notice must be published. It also will shrink the length of notices by declaring that a full legal description need not be published.
Rep. Jimmy Matlock, R-Lenoir City, who sponsored the bill drafted by the bankers association, said the current requirements unnecessarily drive up costs of foreclosures.
Critics said the bill undermines one of the few safeguards for borrowers in a state that already makes it easier to foreclosure of a property than most other states.
Some said there are still cases where individuals learn their property is facing foreclosure through a newspaper notice, even though the law otherwise required notification by certified mail.
One example offered was where a couple has separated and the spouse receiving the notice does not inform the other, who is responsible for payment. And Rep. Eric Watson, R-Cleveland, said he knew of a situation were an accident sent a homeowner into a nursing home for months, where the mailed notice was not received as a bank moved forward with foreclosure.
On the other hand, Rep. Johnny Shaw, D-Bolivar, who operates radio stations, jokingly suggested the bill be amended to require newspapers to publish foreclosure notices on their front page. Matlock said that would not be practical.
The bill now awaits a vote on the Senate floor.
Legislation to cut back on the number and length of home foreclosure legal notices now required in Tennessee is being pushed by bankers who stand to save money if the bill passes and opposed by newspapers that stand to lose money.
While that is clear, the two sides – both aided by a contingent of lobbyists – clashed sharply over whether the proposed change would benefit financially strapped homeowners and the general public as the bill advanced in the House last week.
As drafted and introduced at the behest of the Tennessee Bankers Association, HB1920 would require that just one notice of a pending foreclosure be published in a newspaper based in the county where the property is located.
Current law requires three notices. That has been the case for more than 125 years in Tennessee, according to Steve Baker, a Nashville foreclosure attorney who testified before committee in support of sticking with the “tried and true” three-time publication rule.
The bill was amended in committee last week to set the number of required notices at two, a move that sponsor Rep. Jimmy Matlock, R-Lenoir City, characterized as “compromising with ourselves.”
The full News Sentinel story is HERE.
The Tennessee Banking Association is pushing legislation that would reduce foreclosure costs for financial institutions, drawing some criticism in a state where it’s already easier to foreclose on homeowners than in most other states.
Excerpt from a story by Chas Sisk:
One of Tennessee law’s few requirements is that banks have to publish a notice of foreclosure three times in a local newspaper. Banks want to cut detailed information about the property from the listings and reduce the number of times they have to run to just once.
Banks and some state lawmakers say that the advertisements are confusing and rarely read and that they simply add to the cost of foreclosures.
“The only people that are guaranteed to get paid are the newspapers,” said state Rep. Jimmy Matlock, the bill’s main sponsor in the House of Representatives.
But opponents of the bill say the advertising cost is small compared with the sums involved in a mortgage and foreclosure. They argue the requirement is the main way in which the broader community learns a foreclosure will take place, opening new opportunities to save homes from foreclosure and bringing more bidders to the sale if one occurs.
… Foreclosure activity in Tennessee rose more than 50 percent from 2006 to 2008, and it remains high, according to data from RealtyTracs and Moody’s Analytics.
“I can’t say that (the bill) is precipitated by the rise in foreclosures,” said Tim Amos, the TBA’s senior vice president and general counsel. “But it may have created awareness.”
(Note: The bill is HB1920. It’s on the calender for House Judiciary Committee Tuesday.)
.…Eight other House members have signed on as co-sponsors. The group includes House Democratic leader Craig Fitzhugh, a West Tennessee bank executive who serves as the bankers association’s president.
In the Senate, the bill is sponsored by state Sen. Jack Johnson, a former banker and chairman of the Senate Commerce Committee. Lt. Gov. Ron Ramsey has expressed limited support for the bill.
Other lawmakers may be sympathetic to the industry. Banks gave more than $200,000 to Tennessee candidates for the state legislature and governor last year, including $184,750 that went to 134 candidates through the TBA’s political action committee. The contributions were in line with the TBA’s donations in previous years.