Legislature(2009 - 2010)BARNES 124

02/23/2009 03:15 PM LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HB 29 ALASKA MINIMUM WAGE TELECONFERENCED
Heard & Held
*+ HB 108 PROPERTY FORECLOSURES AND EXECUTIONS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
HB 108-PROPERTY FORECLOSURES AND EXECUTIONS                                                                                   
                                                                                                                              
CHAIR OLSON announced  that the final order of  business would be                                                               
HOUSE  BILL   NO.  108,  "An   Act  relating  to   real  property                                                               
foreclosures, to the sale of  property on execution, and to deeds                                                               
of trust."                                                                                                                      
                                                                                                                                
3:47:15 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:47 p.m. to 3:48 p.m.                                                                       
                                                                                                                                
3:48:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JAY  RAMRAS, Alaska State  Legislature, introduced                                                               
his staff,  Jane Pierson.   He explained that the  Alaska Housing                                                               
Finance Corporation  (AHFC) recently  presented before  the House                                                               
Economic Development,  Trade, and Tourism.   Thus, he said  he is                                                               
happy  to report  to the  committee  that the  housing market  in                                                               
Alaska  is strong,  and foreclosures  are at  a historically  low                                                               
rate.  He  mentioned that one issue that remains  is how to treat                                                               
the equity in  situations in which a homeowner  has a significant                                                               
amount of  equity and faces  foreclosure.  He opined  banks often                                                               
become  interested  only  in "making  themselves  whole"  without                                                               
concern   for  the   homeowner's   equity   during  real   estate                                                               
foreclosures.     He  related  his   interest  is  to   create  a                                                               
marketplace  with  multiple  interested  buyers  instead  of  one                                                               
interested  buyer, which  is often  the bank.   He  surmised that                                                               
when  multiple buyers  are  interested  in foreclosure  property,                                                               
that the homeowner who is  defaulting on his/her loan will obtain                                                               
a better price for the home.                                                                                                    
                                                                                                                                
3:50:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAMRAS  offered  that   when  a  homeowner  loses                                                               
his/her home, at  least if the owner obtains a  decent return the                                                               
person  could have  a  "small  nest egg  to  restart  life".   He                                                               
pointed out  that the language in  this bill passed the  House in                                                               
the  25th  Legislature, as  House  Bill  163 but  some  questions                                                               
subsequently arose could not be  resolved during the remainder of                                                               
the legislative session and the bill died.                                                                                      
                                                                                                                                
3:51:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BUCH recalled  House Bill 163 when  it came before                                                               
the legislature  last year.   He said he appreciated  the sponsor                                                               
coming  forth  by  reintroducing  the   bill.    He  related  his                                                               
understanding  that   the  state  has  an   outdated  method  for                                                               
advertising.   He inquired as to  whether the intent of  the bill                                                               
is  to  upgrade  the  means to  disseminate  information  to  the                                                               
public.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  RAMRAS  agreed.    He  opined  that  people  have                                                               
migrated from using classified advertising  to website lists like                                                               
"Craig's List."                                                                                                                 
                                                                                                                                
REPRESENTATIVE  RAMRAS,  in  response to  Representative  Holmes,                                                               
explained the  version of  House Bill 163  that passed  the House                                                               
last legislature is the starting point for HB 108.                                                                              
                                                                                                                                
3:53:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE COGHILL recalled  that timing, at the  time of the                                                               
sale, was raised as an issue during foreclosures.                                                                               
                                                                                                                                
REPRESENTATIVE RAMRAS agreed.                                                                                                   
                                                                                                                                
REPRESENTATIVE  RAMRAS,  in  response to  Representative  Neuman,                                                               
explained  the idea  for the  bill came  about when  an attorney,                                                               
Stephen  Routh, identified  what he  believed was  a flaw  in the                                                               
foreclosure   process.     Additionally,  Representative   Ramras                                                               
recalled other  parties expressed concern that  perhaps Mr. Routh                                                               
would "have  an angle".   However, he  recalled that some  of his                                                               
own best ideas  have come from first-hand  experiences. He opined                                                               
that HB 108  is meant to provide protection of  excess equity for                                                               
homeowners.   He related a scenario  in which a home  whose value                                                               
is $100,000  and a person owes  $50,000 on the home.   He offered                                                               
that the remaining  money represents the homeowner's  equity.  He                                                               
related when a  bank "buys out" the  borrower during foreclosure,                                                               
the homeowner who  defaulted on the loan will not  gain access to                                                               
the equity.                                                                                                                     
                                                                                                                                
3:57:13 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAMRAS,  in  response to  Representative  Neuman,                                                               
explained when a bank is the  only buyer, the bank will only seek                                                               
what  is  owed on  the  loan.    However,  if three  buyers  were                                                               
interested in  purchasing the home  under foreclosure,  a bidding                                                               
process would ensue, he explained.                                                                                              
                                                                                                                                
3:58:04 PM                                                                                                                    
                                                                                                                                
JANE  PIERSON, Staff,  Representative  Jay  Ramras, Alaska  State                                                               
Legislature,  responded  to   Representative  Neuman  by  stating                                                               
Section 10  describes how  proceeds are to  be distributed.   She                                                               
read a portion of proposed AS 34.20.080(f)(1), as follows:                                                                      
                                                                                                                                
     (1)  the  beneficiary  of  the   deed  of  trust  being                                                                    
     foreclosed  until  the  beneficiary is  paid  the  full                                                                    
     amount  that is  owed under  the deed  of trust  to the                                                                    
     beneficiary;                                                                                                               
                                                                                                                                
     (2)  the persons  who held,  at the  time of  the sale,                                                                    
     record interests, except easements, in the property...                                                                     
                                                                                                                                
MS.  Pierson  interpreted  these  paragraphs  to  mean  that  the                                                               
interests shall  be made whole  and the higher priority  shall be                                                               
satisfied before  distribution is made to  the recorded interest.                                                               
Thus, once those  that are owed, aside from the  owner, get their                                                               
share, the  remainder goes  to the previous  owner of  the house,                                                               
she related.                                                                                                                    
                                                                                                                                
3:59:55 PM                                                                                                                    
                                                                                                                                
MS.  PIERSON  reviewed  the  sectional analysis  of  HB  108,  as                                                               
follows:                                                                                                                        
                                                                                                                                
     Section  1. removes  the  posting  requirements at  the                                                                    
     U.S. Post Office.                                                                                                          
                                                                                                                                
     Section  2.  Adds  notice  of   execution  of  sale  of                                                                    
     property also  be noticed on  the Internet  website and                                                                    
     describes the  requirements that the website  must meet                                                                    
     to qualify.                                                                                                                
                                                                                                                                
     Section  3. Amends  AS 09.35.142  to allow  an Internet                                                                    
     website  owner to  bring a  court  action to  establish                                                                    
     that the website qualifies under AS 09.35.140(b)                                                                           
                                                                                                                                
     Section 4. Amends AS 34.20.070(b)  to adjust to 90 days                                                                    
     the  minimum length  of time  that must  elapse between                                                                    
     recording a  notice of default  on a deed of  trust and                                                                    
     holding the foreclosure sale. Sets  a limit of two days                                                                    
     (before a foreclosure sale) when  certain defaults on a                                                                    
     deed of trust may be cured by a specific payment.                                                                          
                                                                                                                                
4:01:12 PM                                                                                                                    
                                                                                                                                
MS. PIERSON continued to review the sectional analysis of HB
108, as follows:                                                                                                                
                                                                                                                                
                                                                                                                                
     Section  5.   Amends  AS  34.20.070(c)   requires  that                                                                    
     possession   be   actual  physical   possession   where                                                                    
     possession  is  required  for  certain  persons  to  be                                                                    
     entitled   to  receive   a   notice   of  default   for                                                                    
     foreclosure sale.                                                                                                          
                                                                                                                                
     Section  6.  Adds  new subsection  to  AS  34.20.070  -                                                                    
     foreclosure by trustee.                                                                                                    
                                                                                                                                
     Proposed AS 34.20.070(e) establishes  when a person who                                                                    
     holds a  lien or  nonpossessory property  interest that                                                                    
     can be inferred  from an inspection of  the property is                                                                    
     entitled  to   receive  a  notice  of   default  for  a                                                                    
     foreclosure sale.                                                                                                          
                                                                                                                                
     Proposed  AS 34.20.070(f)  allows a  trustee additional                                                                    
     time after  recording to deliver the  notice of default                                                                    
     when the trustee delivers the  notice personally to the                                                                    
     property or to an occupant  of the property. Allows the                                                                    
     trustee  to place  the  notice on  the  property or  as                                                                    
     close  as practicable  to  the  property under  certain                                                                    
     conditions.                                                                                                                
                                                                                                                                
     Proposed  AS  34.20.070(g)  states  that  an  affidavit                                                                    
     signed  by a  trustee or  another person  who delivered                                                                    
     notice  personally  under  sec. 34.20.070(f)  is  prima                                                                    
     facie evidence that the  trustee complied with proposed                                                                    
     AS 34.20.070(f). Establishes a conclusive presumption.                                                                     
                                                                                                                                
     Proposed AS 34.20.070(h) establishes  how a trustee may                                                                    
     satisfy the  notice requirements for a  person known by                                                                    
     the trustee to be deceased.                                                                                                
                                                                                                                                
4:02:52 PM                                                                                                                    
                                                                                                                                
MS. PIERSON continued to review the sectional analysis of HB
108, as follows:                                                                                                                
                                                                                                                                
     Proposed AS 34.20.070(i) establishes  how a trustee may                                                                    
     satisfy the  notice requirements for a  person known by                                                                    
     the trustee to be deceased  and for whom the trustee or                                                                    
     the  deed of  trust beneficiary  knows that  a personal                                                                    
     representative  has  been  appointed for  the  deceased                                                                    
     person.                                                                                                                    
                                                                                                                                
     Proposed  AS  34.20.070(j)  states   that  an  heir  or                                                                    
     devisee  of   a  deceased   person  must   challenge  a                                                                    
     foreclosure  sale  within  90  days  if  alleging  non-                                                                    
     receipt of  notice and  if the  trustee gave  notice as                                                                    
     required by (h) - (i).                                                                                                     
                                                                                                                                
     Proposed AS 34.20.070(k) describes  the persons who may                                                                    
     bring a court action to enjoin a foreclosure sale.                                                                         
                                                                                                                                
     Proposed  AS  34.20.070(l)  states that  when  a  court                                                                    
     injunction  action meets  certain  conditions, a  court                                                                    
     may impose conditions that  it considers appropriate to                                                                    
     protect the deed of trust beneficiary.                                                                                     
                                                                                                                                
     Proposed AS  34.20.070(m) defines certain terms  for AS                                                                    
     34.20.070.                                                                                                                 
                                                                                                                                
4:03:51 PM                                                                                                                    
                                                                                                                                
MS. PIERSON continued to review the sectional analysis, as                                                                      
follows:                                                                                                                        
                                                                                                                                
     Section 7.  AS 34.20.080(a) is amended  to require that                                                                    
     the  proceeds from  a foreclosure  sale  are placed  in                                                                    
     escrow until  disbursed. This section allows  a trustee                                                                    
     to accept foreclosure bids  by telephone, the Internet,                                                                    
     and electronic mail if certain conditions are met.                                                                         
                                                                                                                                
     Section   8.  Amends   AS  34.20.080(b)   Allowing  the                                                                    
     attorney or other  agent of the trustee  to conduct the                                                                    
     sale.   Additionally,  allows   the   trustee  to   set                                                                    
     reasonable  rules for  the conduct  of  the sale.  Adds                                                                    
     language that  conforms the deed  delivery requirements                                                                    
     to  the  new  provision  in  proposed  AS  34.20.070(g)                                                                    
     allowing the trustee to rescind  the sale under certain                                                                    
     circumstances.                                                                                                             
                                                                                                                                
     Section   9.  Amends   AS  34.20.080(e)   Limiting  the                                                                    
     postponement of a foreclosure sale  to not more than 12                                                                    
     months  unless   a  new  notice   of  sale   is  given.                                                                    
     Establishes that postponement for  up to 12 months does                                                                    
     not provide a basis for challenging the validity of                                                                        
     the foreclosure sale.                                                                                                      
                                                                                                                                
4:04:59 PM                                                                                                                    
                                                                                                                                
MS. PIERSON continued with the sectional analysis, as follows:                                                                  
                                                                                                                                
     Section 10. Adds a new subsection to AS 34.20.080.                                                                         
                                                                                                                                
     Proposed  AS   34.20.080(f)  indicates  how   any  cash                                                                    
     proceeds  of  the  sale are  to  be  distributed  after                                                                    
     delivery of a deed.                                                                                                        
                                                                                                                                
     Proposed AS  34.20.080(g) allows a trustee  to withhold                                                                    
     delivery of  the deed  for up  to five  days, prohibits                                                                    
     the  trustee  from  issuing   the  deed  under  certain                                                                    
     conditions,  and describes  what  the  trustee must  do                                                                    
     when rescinding the sale.                                                                                                  
                                                                                                                                
     Proposed   AS  34.20.080(h)   allows  the   trustee  to                                                                    
     reschedule  a  rescinded  sale, establishes  a  minimum                                                                    
     time that  must elapse after the  rescinded sale before                                                                    
     the new  sale may be  held, and establishes  the notice                                                                    
     procedure that  the trustee must follow  for rescinding                                                                    
     the sale.                                                                                                                  
                                                                                                                                
     Proposed AS 34.20.080(i) establishes  that if a sale is                                                                    
     not rescinded  it completely  terminates the  rights of                                                                    
     the trustor of the deed in the property.                                                                                   
                                                                                                                                
     Section  11.  Amends   AS  34.20.120(a),  allowing  the                                                                    
     attorneys for the beneficiaries  or their successors in                                                                    
     interest  to execute  and acknowledge  the substitution                                                                    
     of a trustee for certain deeds of trust.                                                                                   
                                                                                                                                
     Section  12.  Amends  AS  34.20.120(b),  which  adds  a                                                                    
     requirement to  the contents of a  trustee substitution                                                                    
     for a  situation when the  substitution is  executed by                                                                    
     the   attorneys   for   the  beneficiaries   or   their                                                                    
     successors.                                                                                                                
                                                                                                                                
4:06:19 PM                                                                                                                    
                                                                                                                                
MS. Pierson continued with the sectional analysis, as follows:                                                                  
                                                                                                                                
     Section  13.   Adds  a  new  section   AS  34.20.125(a)                                                                    
     requiring  a trustee  to provide  a surety  bond before                                                                    
     performing  trustee  duties  under   a  deed  of  trust                                                                    
     foreclosure.                                                                                                               
                                                                                                                                
     AS 34.20.125(b)  requires the bond to  be terminable at                                                                    
     any  time  by  the  surety by  complying  with  certain                                                                    
     requirements, indicates  when the bond  terminates, and                                                                    
     indicates  that   the  surety   is  not   liable  after                                                                    
     termination for more than the face amount of the bond.                                                                     
     States that  a revision  of the amount  of the  bond is                                                                    
     not cumulative.                                                                                                            
                                                                                                                                
     AS  34.20.125(c),  gives   notice  requirements  for  a                                                                    
     termination of the bond.                                                                                                   
                                                                                                                                
     AS 34.20.125(d),  requires a  trustee to  file evidence                                                                    
     of a  bond each year  with the Department  of Commerce,                                                                    
     Community, and Economic  Development (DCCED).  Requires                                                                    
     the  department   to  verify   that  the   evidence  is                                                                    
     satisfactory, keep an updated list of bonded trustees.                                                                     
                                                                                                                                
     AS  34.20.125(e)  exempts   certain  persons  from  the                                                                    
     bonding requirements.                                                                                                      
                                                                                                                                
     AS  34.20.125(f) defines  "department" in  this section                                                                    
     to mean the DCCED.                                                                                                         
                                                                                                                                
4:08:15 PM                                                                                                                    
                                                                                                                                
STEPHEN ROUTH, Attorney, Routh &  Crabtree APC, stated that he is                                                               
an attorney with  the firm Routh & Crabtree, APC  and that he has                                                               
practiced  law  for  over  30  years.    He  related  during  his                                                               
practice,  he  has handled  thousands  of  foreclosures over  the                                                               
years.   He reiterated that  this language passed the  House last                                                               
legislature as House Bill 163  with unanimous support.  He stated                                                               
that  HB  108 is  supported  by  credit unions,  title  insurance                                                               
companies, and  banks.   He recalled that  he has  discussed last                                                               
year's  bill   with  groups  including  Alaska   Public  Interest                                                               
Research Group (AkPIRG)  and legal services.  He  said, "The bill                                                               
is  good  for  borrowers,  title  agents,  finance  institutions,                                                               
cleans up  language, streamlines process."   He related  that his                                                               
office  notices the  impacts from  imprecise  language since  his                                                               
firm handles litigation.                                                                                                        
                                                                                                                                
MR. ROUTH  opined that litigation  solves problems, but  not very                                                               
efficiently.  He offered his  belief that HB 108 contains cleanup                                                               
language.  He recalled Representative  Ramras's staff referred to                                                               
language in  current law  which states  "three months",  but that                                                               
"90  days" is  more precise.   He  mentioned problems  exist with                                                               
requirements to post notices in  U.S. Post offices since the USPO                                                               
will no  longer allow postings  of state notices.   He summarized                                                               
by  relating  that  the  language   in  the  bill  was  built  on                                                               
consensus,  with input  from  title  companies, other  attorneys,                                                               
financial institutions, and borrowers'  groups.  He related three                                                               
other states have mandated Internet  requirements since last year                                                               
including  Florida.    He  outlined   problems  with  notices  in                                                               
newspapers since the publications are not precisely listed.                                                                     
                                                                                                                                
4:11:55 PM                                                                                                                    
                                                                                                                                
MR. ROUTH detailed the foreclosure  process, which he said begins                                                               
with  a  default  payment,  and the  beneficiary  or  the  lender                                                               
records  the notice  of  default, which  is  mailed, posted,  and                                                               
published  and a  sale  is  held.   He  noted  the proposed  bill                                                               
details  the mail  and posting  requirements.   He stressed  that                                                               
people can show up  and bid at a real estate  auction if they are                                                               
aware of  the sale.   He emphasized when no  one shows up  at the                                                               
real  estate auction,  the property  reverts to  the lender.   He                                                               
opined  that the  situation  is  bad for  the  bank  and for  the                                                               
neighborhood.   He further opined  that property values  in areas                                                               
surrounding  the   foreclosure  drop,   which  can  lead   to  an                                                               
escalation of defaulted  loans.  He offered his  belief that when                                                               
someone learns  about a pending  sale and  buys a home  and moves                                                               
in, the  process is good  for the neighborhood and  the borrower.                                                               
He characterized  it as  a "win-win."   He  related from  his own                                                               
experience  that  his  office  uses a  website  to  provide  free                                                               
service.    He  opined  instances   in  which  property  is  well                                                               
presented  on  a website  will  attract  bidders and  on  average                                                               
property is twice as likely to be sold to a third party.                                                                        
                                                                                                                                
4:13:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HOLMES  referred to the Internet  requirements set                                                               
out in  Section 2.   She said she agrees  with the idea  of using                                                               
the Internet.  However, she said  she wants to be sure people can                                                               
qualify.  She stated the  proposed language sets out six criteria                                                               
that must be met.  She inquired  as to how many websites would be                                                               
able to comply with those standards.                                                                                            
                                                                                                                                
MR.  ROUTH  recalled  when  he  checked  last  year,  that  three                                                               
websites  met the  criteria, although  he thought  currently more                                                               
might meet  the criteria.   He added  that the  requirements were                                                               
added  in  an  attempt  to track  the  newspaper  publication  in                                                               
existing law.   Thus, it was important to find  sources that were                                                               
not   subscription   based  but   were   free   to  the   public.                                                               
Additionally, it  was important to  not bury the notice  within a                                                               
website  like  "Amazon.com".     He  opined  that  the  provision                                                               
requiring  continuous operation  was to  provide continuity.   He                                                               
explained  that the  viewership was  considered a  low number  of                                                               
hits.   Thus  5,000  appeared to  be  a low  number.   The  final                                                               
requirement that a  website must be a business with  an office in                                                               
Alaska was  to add a local  presence.  He stated  the requirement                                                               
was added to  prevent situations such as the  only contact number                                                               
for the  business is an  800 number, or  to contact someone  in a                                                               
foreign country like Bangladesh.                                                                                                
                                                                                                                                
4:16:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HOLMES  agreed the criteria  made a lot  of sense.                                                               
She referred to paragraph (3),  to be used primarily to advertise                                                               
real  property under  foreclosure.   She inquired  as to  whether                                                               
newspaper  sites  such  as  "Adn.com"  would  qualify  since  the                                                               
website has a section of the classifieds that list foreclosures.                                                                
                                                                                                                                
MR.  ROUTH answered  that yes,  the  website would  qualify.   He                                                               
stated that  the Anchorage Daily  News meets the  requirement for                                                             
5,000  "hits".     He  added  that  when  he   last  checked  the                                                               
publication had 76,000 monthly users.                                                                                           
                                                                                                                                
REPRESENTATIVE  HOLMES  stated she  just  wanted  to ensure  that                                                               
online  newspapers  were  not   precluded  from  advertising  the                                                               
foreclosure notices.                                                                                                            
                                                                                                                                
4:17:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HOLMES referred  to Section 4 of HB  108, which is                                                               
the  requirement the  homeowner must  show up  at least  two days                                                               
prior to  the sale to  "cure a default".   She recalled  the time                                                               
had  been shortened  from  five to  two days.    She related  her                                                               
understanding that  the primary reason  for HB 108 is  to protect                                                               
the borrower.  She expressed  concern that if a borrower appeared                                                               
at the bank  the day before the foreclosure sale,  the bank would                                                               
not accept  the payment and  would continue with  the foreclosure                                                               
sale.   Representative  Holmes reiterated  her  concern over  the                                                               
two-day requirement in Section 4 of HB 108.                                                                                     
                                                                                                                                
4:19:03 PM                                                                                                                    
                                                                                                                                
MR.  ROUTH agreed  that the  intent is  to not  have property  in                                                               
foreclosure.    However,  he  stated   what  happens  in  general                                                               
practice is  that people will  push the deadline.   He emphasized                                                               
his belief that banks will  not ever refuse "any borrower handing                                                               
them  money."   He said  that turning  away money  is not  in the                                                               
bank's best  interest.  He  related that the "two  day provision"                                                               
helps to  avoid confusion.   He related  a scenario in  which the                                                               
borrower rushes  up at  the wrong time,  but the  foreclosure has                                                               
already  happened.    He  related another  scenario  in  which  a                                                               
borrower rushes up and has a check  drawn on a Lower-48 bank.  He                                                               
mentioned a third  scenario in which a  borrower provides nickels                                                               
and dimes  and the  bank needs  a counting  machine to  count it.                                                               
He said, "This  just gives a little breathing room  at the end so                                                               
that it doesn't  put the borrower in the position  of missing the                                                               
sale or  being late, or  put the trustee  in the position  of not                                                               
knowing what to  do because there's been  an inappropriate tender                                                               
of  funds."   He  opined  if  those circumstances  occurred,  his                                                               
office's response  would try to  postpone the sale to  obtain the                                                               
funds.  He said,  "I'm not in love with the 2  days.  We proposed                                                               
5 days,  initially.   I'm okay with  2 days.   I'm okay  with one                                                               
day.  I'm okay with no days.   It's trying to avoid the confusion                                                               
which  happens  at  the  last  minute, as  much  to  protect  the                                                               
borrower as anybody else."                                                                                                      
                                                                                                                                
REPRESENTATIVE  HOLMES  stated  that Mr.  Routh's  testimony  was                                                               
helpful.                                                                                                                        
                                                                                                                                
4:21:26 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 4:21 p.m. to 4:22 p.m.                                                                       
                                                                                                                                
4:22:15 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON passed the gavel over to Representative Lynn.                                                                       
                                                                                                                                
4:22:40 PM                                                                                                                    
                                                                                                                                
ROBERT SCHMIDT, Attorney, stated that  he is an attorney with the                                                               
firm of  Groh Eggers LLC, but  that he is appearing  on behalf of                                                               
himself.   He opined that  this bill  is in substance  very good.                                                               
He related that HB 108 codifies  the common law, and adds clarity                                                               
to the  foreclosure process and  he encourages passage of  HB 108                                                               
He offered  that he has only  one substantive issue with  HB 108,                                                               
which  has  already  been  brought  up,  which  is  the  Internet                                                               
publication issue.  He expressed  concern that passage of HB 108,                                                               
as written, might  only allow one website that  complies with the                                                               
provisions, which would be usa-foreclosure.com  which is owned by                                                               
Mr. Routh.   He offered that the concept  of additional publicity                                                               
resulting  in  more  borrowers,  at a  higher  bid  price,  could                                                               
provide  the defaulted  borrower with  a higher  sales price  and                                                               
protection  against  "clouding  values in  the  neighborhood"  is                                                               
good.  However,  he reiterated his concern that  as written other                                                               
parties would not be able to compete.                                                                                           
                                                                                                                                
MR. SCHMIDT  opined that "Craig'slist" would  not qualify because                                                               
senior  management offices  are not  in Alaska.   He  offered his                                                               
belief  that groheggers.com  would not  qualify for  two reasons.                                                               
First,  the website  does not  receive 10,000  unique visits  per                                                               
month  although his  firm has  advertised  foreclosures for  many                                                               
years.  Second, the  purpose  of  his firm's  website  is not  to                                                               
advertise  real property  by foreclosure.    He recalled  earlier                                                               
testimony by Mr. Routh, that  a company whose website contained a                                                               
section  dedicated to  foreclosures would  be sufficient  to meet                                                               
the criteria  for posting  foreclosure notices.   He  pointed out                                                               
the  nearly   universal  practice   of  attorneys   that  conduct                                                               
foreclosures in  the state  to publish  their notices  of default                                                               
with  the  Alaska Journal  of  Commerce  since  it is  the  least                                                               
expensive publication.   He said, " When you  publish your notice                                                               
of  default,  you  automatically  have  your  notice  of  default                                                               
published  on their  website."   He encouraged  the committee  to                                                               
take one  of two steps.   He referred  to last year's  House Bill                                                               
163.   He  related that  the bill  sections relating  to Internet                                                               
publication  were removed.   Alternately,  he suggested  that the                                                               
committee  could amend  proposed AS  09.35.140 (c)  and eliminate                                                               
paragraphs  (3),(5),  and  (6)  so  an  Internet  site  would  be                                                               
available to any  person and would be completely  free for public                                                               
viewing, and would have been in operation for more than a year.                                                                 
                                                                                                                                
4:26:20 PM                                                                                                                    
                                                                                                                                
MR.  SCHMIDT   related  his  understanding   that  it   would  be                                                               
informative to state which website  would not qualify.  He opined                                                               
that besides  his firm's  website, bank  websites or  the state's                                                               
website  would not  qualify since  the primary  reason is  not to                                                               
advertise real property under foreclosures.   He reminded members                                                               
that  under the  Alaska  Housing Finance  Corporation (AHFC)  the                                                               
state is  a significant player in  the mortgage market.   He said                                                               
he  believes  that  HB  108  is an  excellent  bill,  which  will                                                               
substantially  improve the  foreclosure process.   He  maintained                                                               
his concern as  well as those of some of  his colleagues with the                                                               
Internet publication requirements.                                                                                              
                                                                                                                                
4:28:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LYNN closed public testimony for today on HB 108.                                                                
He announced that public testimony could be reopened by Chair                                                                   
Olson at the next hearing of HB 108.                                                                                            

Document Name Date/Time Subjects
01 HB29 ver A.pdf HL&C 2/23/2009 3:15:00 PM
HB 29
01 HB108 ver A.pdf HL&C 2/23/2009 3:15:00 PM
HB 108
02 HB29 Sponsor Statement.pdf HL&C 2/23/2009 3:15:00 PM
HB 29
03 HB29 Sectional Analysis.pdf HL&C 2/23/2009 3:15:00 PM
HB 29
04 HB029-DOLWD-WH-02-11-09.pdf HL&C 2/23/2009 3:15:00 PM
HB 29
05 HB29 ADN Article.pdf HL&C 2/23/2009 3:15:00 PM
HB 29
06 HB29 Poverty Guideline.pdf HL&C 2/23/2009 3:15:00 PM
HB 29
07 HB29 NCSL Minimum Wage List.pdf HL&C 2/23/2009 3:15:00 PM
HB 29
02 HB108 Sponsor Statement.pdf HL&C 2/23/2009 3:15:00 PM
HB 108
03 HB108 Sectional Analysis.pdf HL&C 2/23/2009 3:15:00 PM
HB 108
04 HB108 Support Letter First American Title Insurance Co.pdf HL&C 2/23/2009 3:15:00 PM
HB 108
05 HB108-DOR-AHFC-02-20-09.pdf HL&C 2/23/2009 3:15:00 PM
HB 108
08 HB29 Legislative Research Shop.pdf HL&C 2/23/2009 3:15:00 PM
HB 29
09 HB29 Card and Kreuger Study.pdf HL&C 2/23/2009 3:15:00 PM
HB 29
10 HB29 Wellington Study.pdf HL&C 2/23/2009 3:15:00 PM
HB 29
Feb 23 Packet Information.pdf HL&C 2/23/2009 3:15:00 PM
HB 29
HB 108