An agreement has been reached on legislation designed to protect homeowners and reduce foreclosures. Representatives from the banking industry, social justice groups, and other interested parties were working out the final details on Thursday.
The legislation, sponsored by Sen. Patricia Torres Ray, DFL-Minneapolis, is scheduled to be on the floor later Thursday.
The proposal has been salvaged from what was billed as the “Homeowners’ Bill of Rights,” pushed by ISAIAH and other social justice groups. That legislation stalled out in committee owing to opposition from the banking industry and other interested parties.
The revamped proposal does not included mandatory mediation for lenders seeking to foreclose on homeowners, the most controversial provision of the original bill. But it does include a prohibition on “dual tracking” practices, whereby lenders proceed with foreclosure efforts while at the same time negotiating a loan modification. It also requires lenders to lay out all options for homeowners who fall behind on their payments and allows them to take legal action if the provisions of the bill are not met.
Lars Negstad, ISAIAH’s strategic campaign coordinator, characterized the compromise as a victory. “It’s definitely a step in the right direction,” Negstad said. “We feel pretty good about it.”
The companion House bill is being carried by Rep. Melissa Hortman, DFL-Brooklyn Park.