Minnesota House of Representatives

Accessibility menu

Menu

Minnesota House of Representatives

State Representative Debra Hilstrom

379 State Office BuildingState Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-3709

For more information contact: Sandy Connolly 651-296-8877

Posted: 2010-01-13 00:00:00
Share on: 



Press/News Releases

HILSTROM, SWANSON, AND SCHEID WILL PUSH FORECLOSURE MEDIATION BILL IN 2010 SESSION



St. Paul, MN - State Representative Debra Hilstrom recently announced that she will try again this year to help struggling homeowners avoid foreclosure by creating a mandatory mediation process between homeowners and lenders. Minnesota Attorney General Lori Swanson, State Senator Linda Scheid and Rep. Hilstrom are working on getting this law enacted; last year, Governor Pawlenty vetoed the Homeowner-Lender Mediation Act (HF 354/SF 340).
“Around the country, courts and legislatures are stepping up to create a process where homeowners in trouble can work with their lenders to try to find solutions," said Hilstrom, chief House author of the Homeowner-Lender Mediation Act. “Minnesota needs to step up too.”
Financially-squeezed homeowners often face bureaucratic gridlock in which lenders lose or misplace paperwork, don’t return phone calls, or claim they lack authority to modify the loan because it has been securitized. The aim of the bill – called the Homeowner-Lender Mediation Act – is to provide a process through which homeowners facing foreclosure can get an audience with their lender to discuss whether a loan modification, short sale, or other remedy besides foreclosure is an option.
The current bill is based on the successful “Farmer-Lender Mediation Act” passed by the Minnesota Legislature in 1986 to tackle the farm crisis. In 1986, Minnesota became the first state in the nation to enact a farmer-lender mediation law, under which a lender could not foreclosure on a family farm unless the lender first offered to mediate the debt. The original Farmer-Lender Mediation Act was renewed by the legislature last year. In November 2009, the University of Minnesota Extension Service announced that a record number of farmers were using the mediation program, with mediations up by 86 percent in 2009 compared to 2008.
“Foreclosures hurt everybody. Our bill tries to bring some common-sense to the process by requiring lenders to communicate with borrowers before a foreclosure occurs to see if a reasonable solution can be found to avoid foreclosure,” said Senator Scheid, chief Senate author of the bill.
Hilstrom, Swanson, and Scheid said that mandatory foreclosure mediation programs are currently operating in at least 14 states. In some cases, the programs have been ordered by the state supreme court or local courts, and others are a result of legislative enactments.
The Homeowner-Lender Mediation Act requires lenders to offer borrowers the opportunity to participate in non-binding mediation before the lender may foreclose on the home. Any borrower wishing to participate in mediation must first undergo financial counseling. The purpose of mediation is to facilitate negotiations between the lender and borrower to try to prevent the foreclosure.
The legislative session reconvenes on February 4th.

News Items

Audio & Video

Galleries

No image galleries found

Minnesota House of Representatives  ·   100 Rev. Dr. Martin Luther King Jr. Blvd. Saint Paul, MN   55155   ·   Webmaster@house.mn