Bill Summary for Bill Number HB06-1387

Date: 04/10/2006

Final
BILL SUMMARY for HB06-1387

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Votes: View-->	Action Taken:
Moved amendment L.001 (Attachment D). The motion Moved amendment L.003 (Attachment E). The motion Moved amendment L.004 (Attachment C). The motion Moved amendment L.005 (Attachment F). The motion Moved to refer House Bill 06-1387, as amended, to	Pass Without Objection Pass Without Objection Pass Without Objection Pass Without Objection PASS

01:35 PM -- House Bill 06-1387

Representative Garcia, prime sponsor, presented House Bill 06-1387 and distributed a brochure from the Attorney General's Office about foreclosure fraud (Attachment A). A handout about the bill was also distributed (Attachment B). He briefly discussed the provisions of the bill. Representative Garcia explained the current foreclosure process in Colorado and stated that the main provision of the bill is to eliminate the redemption period and to extend the cure period. The cure period is the time during which the person in default can "cure" a loan by paying the amount he or she is behind before foreclosure. The redemption period is the time after the foreclosure sale where the person in default can pay off the entire balance of the loan and redeem the property. He stated that extending the cure period will help consumers by allowing them more time to cure their default while keeping the whole foreclosure time frame the same which appeases the financial institutions.

Representative Garcia talked about the current problems with fraud and the foreclosure process and the reasons the bill is necessary. Representative Garcia responded to a question about the additional fees created in the bill.

01:49 PM -- Jack Arrowsmith, Douglas County Public Trustee, testified in support of the bill. He displayed billboards that illustrated the 33 county foreclosure numbers and a pie chart of the percentage of owner redemption versus the owner cures. There was discussion about whether Colorado is rated as one of the highest states with mortgage fraud because of to the variety of mortgages that are offered.

01:58 PM -- Jan Zavislan, Deputy Attorney General, Consumer Protection, testified in support of the bill. He stated that there are some important components of the bill including:

there will be education of consumers by the public trustees about foreclosure;
the time between the notice of default and foreclosure sale is increased;
extending the cure period will benefit consumers by reducing the immediacy and pressure of foreclosure, allowing them to seek counseling etc.; and
eliminating redemption rights for junior leinors will reduce fraud.

Mr. Zavislan was asked why he believes fraud is so prevalent in Colorado. He stated that he believes the variety of loans has something to do with it. There was committee discussion about stronger enforcement against the fraudulent mortgage lenders.

02:12 PM -- Robert Hopp, representing the Colorado Bar Association, testified in support of the bill. He talked about some of the provisions in the bill including: extending the cure period, extending the time between the notice to the debtor from the lender and the foreclosure sale, and the limitation of liability. Mr. Hopp responded to questions.

02:21 PM

There was discussion about amendment L.004 (Attachment C).

02:21 PM -- Annemarie Jensen, representing Housing Colorado, a statewide advocate for affordable housing, testified in support of the bill. She spoke about the provision of the bill that would allow the public trustees to give educational material to people in foreclosure. She talked about a possible amendment that would add to the educational material provision, community resources available to consumers to help prevent foreclosure.

02:26 PM -- Cathy Wanstrath, representing Land Title Association of Colorado, testified in support of the bill.

02:27 PM -- Don Childears, representing the Colorado Bankers Association, testified in support of the bill. Mr. Childears was asked to discuss why mortgage fraud is so high in Colorado.

02:30 PM -- Rich Krohn, representing the Colorado Public Trustees Association, testified in support of the bill. He stated he was there to respond to questions and addressed previous testimony. Mr. Krohn stated that in creating the legislation, they committed to the lenders that the foreclosure process would not be extended. He also stated that by doubling the time to cure and shortening the time to pay in full, would help the consumer. He responded to questions.

02:39 PM -- Zach Urban, representing himself, testified in support of the bill especially with the educational component.


BILL:	HB06-1387
TIME:	02:42:52 PM
MOVED:	Coleman
MOTION:	Moved amendment L.001 (Attachment D). The motion passed without objection.
SECONDED:	Knoedler
		VOTE
	Balmer
	Borodkin
	Butcher	Excused
	Carroll M.
	Coleman
	Knoedler
	Liston
	McCluskey
	Paccione
	Penry	Excused
	Welker	Absent
	Cerbo
	Marshall
Not Final YES: 0 NO: 0 EXC: 2 ABS: 1 FINAL ACTION: Pass Without Objection


BILL:	HB06-1387
TIME:	02:43:44 PM
MOVED:	Liston
MOTION:	Moved amendment L.003 (Attachment E). The motion passed without objection.
SECONDED:	Knoedler
		VOTE
	Balmer
	Borodkin
	Butcher	Excused
	Carroll M.
	Coleman
	Knoedler
	Liston
	McCluskey
	Paccione
	Penry	Excused
	Welker
	Cerbo
	Marshall
Not Final YES: 0 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB06-1387
TIME:	02:44:35 PM
MOVED:	Coleman
MOTION:	Moved amendment L.004 (Attachment C). The motion passed without objection.
SECONDED:	Borodkin
		VOTE
	Balmer
	Borodkin
	Butcher	Excused
	Carroll M.
	Coleman
	Knoedler
	Liston
	McCluskey
	Paccione
	Penry	Excused
	Welker
	Cerbo
	Marshall
Not Final YES: 0 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB06-1387
TIME:	02:45:27 PM
MOVED:	Coleman
MOTION:	Moved amendment L.005 (Attachment F). The motion passed without objection.
SECONDED:	Carroll M.
		VOTE
	Balmer
	Borodkin
	Butcher	Excused
	Carroll M.
	Coleman
	Knoedler
	Liston
	McCluskey
	Paccione
	Penry	Excused
	Welker
	Cerbo
	Marshall
Not Final YES: 0 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB06-1387
TIME:	02:47:48 PM
MOVED:	McCluskey
MOTION:	Moved to refer House Bill 06-1387, as amended, to the Committee of the Whole. The motion passed 12-0.
SECONDED:	Coleman
		VOTE
	Balmer	Yes
	Borodkin	Yes
	Butcher	Excused
	Carroll M.	Yes
	Coleman	Yes
	Knoedler	Yes
	Liston	Yes
	McCluskey	Yes
	Paccione	Yes
	Penry	Yes
	Welker	Yes
	Cerbo	Yes
	Marshall	Yes
Final YES: 12 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS