Two lawmakers propose changes on foreclosures

RICHMOND

Two state lawmakers often at odds have teamed up this year to tackle problems arising from foreclosures and the confusion that can accompany them.

State Sen. Donald McEachin, D-Henrico, and Del. Bob Marshall, R-Prince William, head a bipartisan group of lawmakers who say they want to simplify the legal labyrinth homeowners facing foreclosure must navigate.

McEachin described Marshall as his "good friend" during a Monday morning news conference called to unveil the agenda; Marshall promised to resume partisan hostilities after the event, drawing laughter from the crowd.

The legislative package includes a bill from Marshall, HB1506, that would set standards for foreclosure proceedings, among them that sales can't occur unless proper land records have been filed in the locality where the property is located, and that a homeowner must be notified 45 days before a planned foreclosure sale.

Marshall said he became aware of issues with mortgage records when a constituent contacted him about a problem determining to whom he owed money.

Some of the lawmakers said the transfer of mortgages during the economic downturn can complicate the process of figuring out who holds a mortgage.

"The more I inquired, the more disturbed I was at the lack of authenticity of the records, at the lack of tracking the records," Marshall said.

That bill and several other proposed changes to foreclosure protocols are opposed by the Virginia Bankers Association.

The state already has a foreclosure process that allows borrowers the opportunity to avoid losing their homes, said Matt Bruning, director of government relations for the association. Extending foreclosure times will delay the economic recovery, he argued.

Marshall said that although big banks attempt to characterize people facing foreclosure as "deadbeats," they are actually "people with upside-down mortgages... people who lost their job."

McEachin's proposed bills include one, SB798, that would require a court order before a foreclosure sale can proceed.

"Citizens are not deprived of life or liberty without due process; they should not lose their homes without due process," he said. "Banks should need to go to court to effectuate foreclosure."

Other bills in the package are being carried by Sen.

J. Chapman "Chap" Petersen, D-Fairfax, and Del. Robin Abbott, D-Newport News.

Petersen is sponsoring measures to require at least 30 days' notice before a foreclosure sale, forbid the use of fabricated documents to obtain a foreclosure, and mandate that mortgage debt assignments be recorded in a local courthouse.

"One of the core governmental functions in my opinion is accurate recordation of land records.... And if you can't count on your local courthouse to keep track of who actually owns your mortgage, then where can you find that information, and who can you rely on for that information?" Petersen said.

Two Virginians whose homes were lost to foreclosure spoke at the event, sharing stories of getting conflicting information from their lenders while vainly trying to keep their houses.

"I just want everyone who has or is facing foreclosure to know I'm telling my story not just for me, but for you," said Susan Brooking of Greene County, who lost her home last fall after receiving conflicting messages from her lender about whether her loan modification had been approved. "I know the emotional pain, stress, frustration and uncertainty you feel."

Julian Walker, (804) 697-1564, julian.walker@pilotonline.com