Homeowner-lender mediation bill resurrected


A bill vetoed last year by Gov. Tim Pawlenty that would promote mediation as a tool to prevent foreclosures has been resurrected, with some changes. 

Sponsored by Rep. Debra Hilstrom (DFL-Brooklyn Center), HF2613 would give homeowners the option of pursuing mediation to avoid foreclosure, under certain conditions. A similar bill was passed by the Legislature in 2009 but was vetoed by Gov. Tim Pawlenty.

The House Labor and Consumer Protection Division approved the bill and referred it to the House Commerce and Labor Committee, where it is scheduled to be heard Feb. 23.

Hilstrom said a number of changes have been made to the bill’s language in an effort to gain broader support. These include

  • it does not increase the length of the foreclosure process;

  • it exempts lenders with five or fewer foreclosures in the last 12 months; and

  • borrowers are required to undergo foreclosure counseling before seeking mediation.

With the changes, Hilstrom said the state’s credit unions now support the bill; however, representatives from the banking industry said they would like to see some additional modifications.

“With respect to the scope of the bill, we’d still like to see it a little more articulate, so that it does not include community bankers,” said David Skilbred, vice president of government relations for Independent Community Bankers of Minnesota.

A House Research summary of the bill’s provisions can be found here.

A companion, SF2170, sponsored by Sen. Linda Scheid (DFL-Brooklyn Park), awaits action by the Senate Judiciary Committee.