Bill Summary for Bill Number HB12-1156

Date: 03/13/2012

Final
BILL SUMMARY for HB12-1156

HOUSE COMMITTEE ON ECONOMIC AND BUSINESS DEVELOPMENT

Votes: View-->	Action Taken:
Moved to adopt amendment L.001 (Attachment J). The Moved to adopt amendment L.002 (Attachment J). The Moved to postpone House Bill 12-1156 indefinitely. Moved to refer House Bill 12-1156, as amended, to	Pass Without Objection Pass Without Objection PASS FAIL

01:29 PM -- House Bill 12-1156

Representative Liston called the committee back to order. Representative McCann, prime sponsor, presented House Bill 12-1156. Current law allows a "holder of an evidence of debt," a bank or other financial institution, to foreclose on real property under a deed of trust, even if the holder's interest is based on an assignment from the original lender and the assignment or other intermediate documents are not produced, by providing a statement from the holder's attorney that the holder's interest in the property is valid. The bill removes this provision from statutes and requires documentation of an unbroken chain of interests in the debt including the current holder, and present authorization to commence the foreclosure if not by the holder, all of which must be filed with the public trustee before a foreclosure sale is authorized.

Under the bill, provisions governing the court order authorizing sale by a public trustee (Colorado Rule of Civil Procedure 120) are changed. The bill places the burden of proof on the holder in all cases to provide documentation showing that it is entitled to foreclose on the property. The bill also states that the Rule 120 order is not a final judgment and does not prejudice other claims, such as claims involving title to the property. An eviction proceeding must be suspended if the Rule 120 order is challenged until the challenge is resolved.

01:39 PM

Representative McCann distributed an article from the Colorado Springs Gazette and The Denver Post regarding foreclosure law (Attachment C and D, respectively). Representative Balmer asked some questions regarding the inspection conducted by the inspector general that she referenced. Representative Liston talked about the number of documents people must sign and read in order to get a mortgage. The committee asked questions regarding the current foreclosure process and the process for selling and transferring loans.

02:17 PM -- William Clouse, representing himself as a foreclosed homeowner, testified in support of the bill. He talked about a home he had given his son that his son fell behind on and the difficulty in trying to catch up with payments and who to contact. Mr. Clouse responded to questions from the committee regarding whether he documented the loan payments and whether he had an attorney.

02:24 PM -- Jan Zavislan, representing the Attorney General's Office, testified neutral on the bill. Mr. Zavislan gave some background on the consumer protection division in the office that he explained has recently been handling an increased number of foreclosure-related complaints. Mr. Zavislan responded to questions from the committee regarding complaints and loan transfers. Representative Swalm asked Mr. Zavislan to discuss why he cannot give an opinion on the bill. In response to a question, Mr. Zavislan explained that foreclosures are taking on average 240 days now and that the foreclosure must finish by 365 days or else it must be refiled. Representative Holbert added that a borrower must have already defaulted for 90 days from a 30-day missed payment period when the foreclosure is initiated.

02:52 PM -- Keith Gantenbein, representing himself as a private practitioner who assists homeowners in default, testified in support of the bill. He said the bill will even the playing field between homeowners and banks. Mr. Gantenbein responded to questions from the committee.

03:08 PM -- Randy Golditch, representing himself, testified in support of the bill. He talked about his experience with his house being wrongfully foreclosed on and explained that his loan was transferred and they continued to make payments to the wrong lender.

03:17 PM -- Jose Vasquez, representing Colorado Legal Services, testified on the bill. He talked about the Rule 120 hearing.

03:22 PM -- Steve and Vivian Rader, representing themselves, testified in support of the bill. Ms. Rader talked about a misappropriated payment that progressed into a number of issues with her lender.

03:31 PM -- Steve Brunette, representing himself, testified in support of the bill and distributed a handout (Attachment E). He directed the committee to page six of the handout regarding no-doc foreclosure. Mr. Brunette responded to questions. Representative Holbert distributed a list of foreclosure bills enacted since 2005 (Attachment F).

03:44 PM -- Cheryl Hoffman, representing herself, as a business owner, testified in support of the bill and distributed a handout of her testimony (Attachment G). She talked about her experience with an illegal foreclosure.

03:52 PM -- Andrew O'Connor, representing himself, testified in support of the bill. Mr. O'Connor responded to questions from the committee.

03:59 PM -- Marcie Jacobs, representing herself, testified in support of the bill and distributed a packet of information (Attachment H).

04:05 PM -- Don Childears, representing the Colorado Banker's Association, testified against the bill. He talked about the economic downturn's effect on the banking industry and explained that the banks do not want to foreclose on these houses. Mr. Childears explained that a majority of the instances presented today do not have to do with banks. Mr. Childears talked about the benefits of the public trustee system in Colorado. Mr. Childears discussed the current foreclosure time frames.

04:20 PM

Jennifer Waller, also representing the Colorado Bankers' Association, distributed and discussed a handout (Attachment I). Mr. Childears discussed the four areas a lender has to prove on page eight of the bill. Representative Balmer asked Mr. Childears to discuss the tier system in banks and the review process of loans. Mr. Childears responded to questions from the committee regarding the potential effects of the bill.

04:57 PM

Mr. Childears continued to respond to questions from the committee.

05:00 PM -- Terry Jones and Mike Rosser, representing the Colorado Mortgage Lenders' Association, testified against the bill. Mr. Jones talked about the benefits of the public trustee system and stated that he agrees with the Mr. Childears' testimony.

05:10 PM

Mike Rosser talked about the recovery in the market that he sees happening, but believes this bill will slow the recovery process down. Mr. Rosser mentioned that the financial services industry is against this bill. Representative Holbert asked about electronic documents.

05:38 PM -- Christine Murphy, representing the Colorado Center on Law and Policy, testified in support of the bill.

05:43 PM -- Corrine Fowler, representing the Colorado Progressive Coalition, testified in support of the bill and stated that the bill is about restoring due process.

05:48 PM -- Representative McCann mentioned that the Senior Lobby supports the bill, but had to leave.

05:49 PM -- Hod Hutson, representing himself, testified in support of the bill.


BILL:	HB12-1156
TIME:	05:56:34 PM
MOVED:	Soper
MOTION:	Moved to adopt amendment L.001 (Attachment J). The motion passed without objection.
SECONDED:	Wilson
		VOTE
	Balmer
	Holbert
	Miklosi
	Priola
	Singer
	Soper
	Swerdfeger
	Szabo
	Tyler
	Williams A.
	Wilson
	Swalm
	Liston

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB12-1156
TIME:	05:56:52 PM
MOVED:	Tyler
MOTION:	Moved to adopt amendment L.002 (Attachment J). The motion passed without objection.
SECONDED:	Wilson
		VOTE
	Balmer
	Holbert
	Miklosi
	Priola
	Singer
	Soper
	Swerdfeger
	Szabo
	Tyler
	Williams A.
	Wilson
	Swalm
	Liston

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB12-1156
TIME:	06:01:02 PM
MOVED:	Wilson
MOTION:	Moved to refer House Bill 12-1156, as amended, to the Committee on Appropriations. The motion failed on a vote of 5-8.
SECONDED:	Williams A.
		VOTE
	Balmer	No
	Holbert	No
	Miklosi	Yes
	Priola	No
	Singer	Yes
	Soper	No
	Swerdfeger	No
	Szabo	No
	Tyler	Yes
	Williams A.	Yes
	Wilson	Yes
	Swalm	No
	Liston	No

YES: 5 NO: 8 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB12-1156
TIME:	06:17:22 PM
MOVED:	Swalm
MOTION:	Moved to postpone House Bill 12-1156 indefinitely. The motion passed on a vote of 8-5.
SECONDED:	Liston
		VOTE
	Balmer	Yes
	Holbert	Yes
	Miklosi	No
	Priola	Yes
	Singer	No
	Soper	Yes
	Swerdfeger	Yes
	Szabo	Yes
	Tyler	No
	Williams A.	No
	Wilson	No
	Swalm	Yes
	Liston	Yes

Final YES: 8 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS

06:18 PM

The committee adjourned.