January 22, 2012
(Denver) – Two Democratic legislators from Denver launched a pair of bills today to help responsible Colorado families avoid mortgage foreclosure and stay in their homes.
The bills introduced at a press conference today by Reps. Crisanta Duran and Beth McCann will protect Colorado neighborhoods and Colorado home values in a real estate market still reeling from the Great Recession.
Currently, 20 percent of homeowners in Colorado are underwater. The largest number of foreclosures is happening in the Denver area, and all data indicates there are tens of thousands of foreclosures still on the horizon.
Rep. Duran’s bill requires mortgage lenders to provide responsible borrowers who are trying to stay in their homes every available alternative — including offering loan modifications where applicable — before executing a foreclosure. It also requires lenders to provide an explanation whenever a borrower is denied a loan modification. The idea is to keep Colorado families in their homes and help stabilize the housing market and the economy.
“If this bill passes, it would create partnerships between lenders and homeowners to help find avenues to cure their debt and keep more families in their homes,” Rep. Duran said. “And if we keep families in their homes, we preserve neighborhoods and support property values.”
Sharon McKee, the owner of the home where the press conference was held, who has been going through the loan modification process for six years, spoke in support of Rep. Duran’s bill.
“Foreclosures hurt everyone, and this is my home. A home which represents our lives—births, deaths, graduations, Christmases,” McKee said. “Banks should be required to provide borrowers with standardized and meaningful explanations of why they are foreclosing and denying a modification.”
Sen. Angela Giron, the Senate sponsor of Rep. Duran’s bill was unable to attend the press conference but sent the following statement on behalf of the bill, which will be starting in the Senate:
“One of the most effective things we can do to help Colorado’s economy is to prevent unnecessary foreclosures. Foreclosures have a devastating impact both on the families they affect and on the economy as a whole. I’m proud to sponsor a bill that provides us a tool to help stop the trend of unnecessary foreclosures. I look forward to working with my fellow legislators, regardless of party affiliation, to pass this important piece of legislation.”
Rep. McCann’s bill closes a loophole in Colorado law that allows lenders to foreclose without offering original documents or documents clearly demonstrating the chain of title to prove that the lender has the right to foreclose. Right now, holders of evidence of debt can foreclose simply by providing a statement from the holder’s attorney that the holder’s interest in the property is valid.
“This bill will save responsible homeowners from getting kicked out of their homes for simple mistakes that could have been avoided by instituting a more solvent process,” Rep. McCann said.
Air Force Veteran Leonard McWilliams told his story of his foreclosure nightmare and spoke on behalf of Rep. McCann’s bill.
“My sons and I have been trying to save our home for over four years,” McWilliams said. “My family is not the only one that is dealing with this crisis; the effects are negative residuals of a troubled economy.”
Will Dickerson, a representative of the Seventh Day Adventist church, spoke in support of both bills.
“The legislation that is being introduced today is a step forward in addressing inequalities that have, for so long, seemed to have been ignored,” Dickerson said. “As people of faith, we are very excited and moved that there are those in the legislature who are taking an interest in these issues.”