March 15, 2012 09:46 PM UTC

HB 1156 goes down in flames - by flamers

• 2 Comments
• by: allyncooper

Tuesday afternoon I attended a hearing at the House Economic and Business Development Committee on HB 1156, a bill by Rep. Beth McCann D-Denver that would have reformed the foreclosure process in Colorado.

Currently, a bank or servicer need only produce an affidavit from its attorney stating documents, such as a deed or assignments, exist. They don’t actually have to produce the documents themselves.

McCann’s bill would have banned the use of affidavits and required a court in a Rule 120 hearing to actually examine the documents and determine if they were authentic. It would have also provided for some limited legal challenges to foreclosure – currently there are almost none.

HB 1156 was really all about restoring due process of law in a legal action, an action that has the power to take away someone’s house. Interesting enough, due process was the rule in Colorado until 2006, when a small group of foreclosure attorneys allied with the banking industry quietly got the law changed to allow the affidavit only procedure.

At the standing room only hearing, testimony was heard from homeowners who had lost their homes in foreclosure without ever seeing any documents, even though they had requested them, and documents that had been fraudulently fabricated.

Of course the banking and real estate interests were there, and they testified against the bill saying the system was working just fine and the bill would make banks think twice about making new loans in Colorado.

The bill went down on a 8 – 5 party line vote with the addition of Rep. John Soper, D – Thornton voting to kill.

But the most ludicrous observation was watching the pawns of the banking industry in action.

After Rep. McCann was finished presenting her bill to the committee, Rep. David Balmer R- Arapahoe  immediately attacked McCann asking if she was accusing the banks of criminal activity – “the same banks that provide jobs to thousands of Coloradans.”  

HB 1156 was about re-establishing due process of law in a legal proceeding, not about jobs. If anything, the banking industry would have to add some jobs if they were required to actually produce the documents they claimed they have in affidavits. And the involvement of these same banks in the financial collapse led to the loss of thousands of jobs in Colorado and a national unemployment rate of over 10%. Obviously Balmer didn’t bring that up.

Nothing like killing a bill with financial blackmail, i.e that it’s a job killer and the banks will stop making loans in Colorado. Regrettably, the rule of law and due process just aren’t that important anymore.