Wednesday, April 13, 2011

Action Alert: Don't make foreclosure easier in Tennesee.

As a housing counselor working for a HUD-approved non-profit housing counseling agency, I see first hand the problems people face in trying to save their home from foreclosure. Tennessee already has one of the easiest foreclosure systems in the country. But yesterday in the Tennessee House Judiciary Sub-committee bankers tried to make foreclosure even easier in Tennessee.  

Tennessee's "non-judicial review" process for foreclosures ranks near the top for ease and speed of foreclosures.
  • No courts. 
  • No judges.
  • No long drawn-out process.
All a bank has to do is:
1. Serve a single letter of notification to the homeowner. 
2. Publish 3 public notices of foreclosure in the area newspaper.  
3. Sell the property at auction. 
The whole process can take less than 21 days.
The only way to slow down the process is to file bankruptcy. Coincidentally, Tennessee has one of the highest bankruptcy rates in the country. 
Now in the Judiciary Subcommittee, bankers hope to make the process even easier.
Their shorter process would be;
 1. A single letter to the homeowner.  
2. A single public notice in the paper.
(No property description in the public notice.) 
(Errors would legally be allowed to appear in the notice.) 
3. Sell the property at auction. 
There are already documented cases across Tennessee where elderly, separated and divorcing couples had no idea their home was being foreclosed upon until someone read it in the paper and alerted them. 

This radical proposal from the banking industry violates several legal cannons including constructive notice, due process, fundamental fairness and the vagueness doctrines (see below).
This is not a conservative or liberal issue nor a Republican or Democratic issue but an issue of fair notice. Please take time right now to click here and email committee members and tell them what you think.   

The Bill Threatens to Break Several Legal Doctrines.
Senate Bill 1299/House Bill 1920 will be heard this week The bill would decrease the number of publications necessary prior to foreclosing on a property from three to one, decrease relevant information contained in the notice, and the bill states that the law would allow errors in the public notice. Important constitutional and judicial doctrines such as constructive notice, due process, fundamental fairness and the vagueness doctrine are violated by this bill.  

Bill Violates the Legal Doctrine of Constructive Notice.
This bill decreases the number of publications for the public notice from three to one – thus violating a legal canon called constructive notice; the publication of a public notice three times. Courts allow constructive notice as a relief from liability for any claim of ignorance of the action.  Should a debtor willfully avoid notice by not opening their mail or claiming that they never received the notice of foreclosure the maxim of constructive notice provides protection for the bank or other entity; it is allowed by courts as legal proof that notice of the action was provided to the individual and or to the community.

Violates Procedural Due Process, Fundamental Fairness Doctrine and Vagueness Doctrines.  
Procedural due process of the law provides that any government action that unfairly deprives an individual of life, liberty, or property is unconstitutional.  This bill changes the standard description of property used for generations in foreclosure matters whereby one can easily identify through the ad the property being taken.  This bill would require only a “concise” description of the land in question; which means only a reference to the deed book and page in the county register of deeds office that contains the complete legal description of the property – it is not reasonable to believe that most citizens would be able to understand that the legal notice of foreclosure is identifying their property by reading such a technical description in the newspaper thus a procedural violation of due process would exist. 
An additional violation of due process set forth by the language of this bill is found in language that states “Any error or defect in the common description of the land shall not in any way void any sale of the land.”  This violates what is called the fundamental fairness doctrine which is synonymous with due process.  
The vagueness doctrine is a legal principle which states that law that does not provide a “person of ordinary intelligence a reasonable opportunity to know what is prohibited, proscribed or claimed” is unconstitutionally vague. This bill seems to allow language in legal notices which is intentionally vague and lacking in commonly useful information by changing the level of detail and standard description historically used to identify the property being taken. 
The above information is from the Open Government Project of the Education and Public Policy Center. EPPC has entered in to a project to defend open government in Tennessee called "Public Notice: under threat." Several pieces of legislation threaten to end public notices in Tennessee's newspapers including notices of upcoming elections, zoning changes, rate increases and many others. 

Please visit to learn more about the impending threat to publication of public notices in Tennessee, watch the videos and read the issue alerts.

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