Indiana Statehouse

A bill that would have eliminated the newspaper publication requirement for foreclosure notices in Indiana was narrowly defeated last week in a vote taken immediately following a committee hearing.

House Bill 1212 had passed the Indiana House 62-34 in January and was in danger of moving another step closer to passage when it was defeated by a vote of 5-4 in the Senate Local Government Committee.

Although it was a big victory for the Hoosier State Press Association (HSPA), the war over foreclosure notices in Indiana isn’t over yet, according to HSPA Executive Director Steve Key. “The language in HB1212 remains eligible for amendment into another bill since it was passed by the House earlier this session,” Key told his members. “HSPA will attempt to monitor bills that could become a home for the sheriffs’ sale notices language.”

A bill that would eliminate foreclosure notices in newspapers is also scheduled to be heard today in Missouri. Senate Bill 250, which would most likely move the notices to websites operated by law firms that serve as mortgage trustees in the state, will be heard in the Senate General Laws Committee. Earlier this year, that same committee voted 5-2 against a different bill that would have moved all official notice to government websites. Newspapers in Missouri are hopeful that earlier vote bodes well for SB250.

Expanding notices in Michigan?

While publishers in Indiana and Missouri are battling to maintain their foreclosure notices, newspapers a little further to the north in Michigan are supporting legislation that would expand the size of the foreclosure notices published in their papers. House Bill 4306 would require mortgagors to include additional information in the foreclosure notices they publish to help delinquent borrowers to understand their rights and add transparency around the auction process.

This unusual effort to increase the size of notices in Michigan is necessary, according to the Michigan Press Association (MPA), due to a series of lawsuits over foreclosure notices that were filed a few years ago against foreclosure lawyers and the Detroit Legal News. Debt collection attorney Brian Parker first sued foreclosure attorneys in the state, claiming they violated the federal Fair Debt Collection Practices Act (FDCPA) by publishing notices without doing enough work to prove that homeowners were in arrears on their mortgages. A few months later he also sued the Legal News, alleging the paper violated the Fair Credit Reporting Act by publishing foreclosure notices pertaining to his clients.

The case against the Legal News was dismissed for lack of cause. The suits against the foreclosure lawyers may have suffered a mortal blow on March 20 when the U.S. Supreme Court ruled 9-0 in an unrelated case that a law firm engaged in non-judicial foreclosure proceedings is not a “debt collector” subject to the FDCPA.

After the suits were initially filed, foreclosure lawyers in Michigan stripped everything out of their clients’ notices that was not specifically required by statute. Language that had previously been voluntarily included in the notices — like contact information for homeowners and lawyers, and the street address of the property  — was purposely excluded, and the average size of a foreclosure notice in the state shrunk from six folios to four, according to Detroit Legal News Co. Chairman and CEO Brad Thompson.

“We spoke with stakeholders in the state and found a lot of confusion around the new notices,” said Thompson, who is also president of the Public Notice Resource Center and immediate past president of MPA. “We needed language to protect all of the parties involved in foreclosures.”

The bill, which is also supported by the Michigan Sheriffs’ Association and the Teamsters Union, was first introduced last year. It flew through the Senate but got tied up in a lame duck session in the House. Although he wasn’t opposed to the foreclosure measure, the governor ended up vetoing the bill it was attached to in the lame duck session.

A committee hearing on HB4306 is scheduled for next week.