Senate Opens Hearings Foreclosure Bills
Hannah Report - January 12, 2010
Differences in opinion about how to address the state's foreclosure crisis became readily apparent Tuesday in the Senate Finance and Financial Institutions Committee as the committee heard sponsor testimony on three bills dealing with various aspects of the issue.
Committee members, particularly Republican members, asked hard questions of Reps. Mike Foley (D-Cleveland) and Denise Driehaus (D-Cincinnati) as they presented HB3 and of Foley and Rep. Ted Celeste (D-Columbus) as they testified on HB9.
A third bill, SB197, which requires courts to establish and operate mediation on the filing of foreclosure action of an occupied residential property, was presented by sponsor Sen. Shannon Jones (R-Springboro). She said it is similar "to the highly successful Foreclosure Mediation Program Model crafted by Chief Justice Moyer." HB306 (Dolan) is the companion bill in the House.
Sen. Keith Faber (R-Celina) focused primarily on issues that he saw as unconstitutional in HB3. These included what he saw as provisions limiting the right to due process as negotiations are mandated. He also objected to the $750 foreclosure filing fee charged lenders or servicers under the bill, calling it "a walk through the door fee" or a tax increase. He questioned why it could not be counted as an expense and recoverable.
Driehaus told him it was one way to help local governments deal with the fallout from foreclosed homes and abandoned properties.
Sen. Chris Widener (R-Springfield), commenting that he had served on the governor's foreclosure task force, asked how the provisions in HB3 fit with the recommendations of that task force. Foley said it had been awhile since he had reviewed those.
Widener asked what they thought would stop foreclosures - apart from the moratorium. Foley said that the counseling services are successful to which Widener commented that the foreclosure prevention and education panel created and funded in 126-SB185 (Padgett) "has never been appointed."
Widener also commented that he believes provisions in HB3 which exempt credit unions and depositories and community banks headquartered in Ohio from the moratorium treats banks unfairly.
He said that approximately 85 percent of foreclosures are due to job loss, health issues and divorce. "What we need to do is create jobs."
Widener also recounted how the system the Department of Commerce has put into place has worked for him as he has addressed foreclosure concerns from constituents.
Sen. Dale Miller (D-Cleveland) asked whether there could be some meshing of data collection efforts, citing the Supreme Court's work in this area. Foley said that would be something to talk about.
Celeste fared somewhat better, telling the committee that his bill deals with the "innocent bystanders" of foreclosure - tenants of properties that are foreclosed on. He said HB9 requires "foreclosure disclosure" including whether a building is in or goes into foreclosure and the date of a sheriff's sale and the conversion of all residential rental agreements to month-to-month rental agreements upon court approval of the sale of the property, thus giving tenants 30 days to find a new home, compared to current law which only gives three days notice before eviction.