Can $11k Buy The Support of a Former Michigan Lt. Governor’s Daughter?
This freshman member of the Michigan House of Representatives received nearly $11,000 from the real estate and banking lobby during her campaign last year. Now she has introduced legislation that appears to have been written by the banking lobby. This legislation would make it easier for lenders to take possession of a home even if the lender lacks legal authority to do so and by eliminating the 6-12 month post-foreclosure redemption period.
But before I get into that, here’s a Reader’s Digest version of how foreclosures in Michigan work.
Unlike most states, Michigan has a 6-12 month post-foreclosure redemption period. A homeowner gets a 6 months redemption period if they own less than 3 acres and a twelve month redemption period if they own more than 3 acres and if they owe less than 10% of the value of the home. This redemption period was included in the law because Michigan is what is known as a non-judicial foreclosure state which means homeowners are denied their day in court unless they decide to shell out large amounts of money to sue their lender over issues regarding their foreclosure. Michigan does their foreclosures by a method referred to as “Foreclosure By Advertisement”.This means the the mortgage servicer (as a representative of the holder of the mortgage) or the note holder must serve the homeowner by tacking the notice on the door or by mail notifying them of the foreclosure sale, the law firm handling the foreclosure is then responsible for advertising the sale in a local publication for 4 consecutive weeks prior to the sale date.
In an attempt to allow families a fighting chance to keep their homes during these uncertain economic times, the Michigan House of Representatives in 2009 voted to modify the state statutes that govern how foreclosures in Michigan for 24 month. It was erroneously assumed the the financial crisis would be over in 24 months.
In July of 2009, revisions were made to MCL 600.3204 and MCL 600.3205 which are the statutes that regulate foreclosure procedures in Michigan. These revisions require attorneys of the mortgage servicer and/or lender to notify home owners they have the right to a judicial foreclosure if they go to homeowner counseling. It also allowed the homeowner a 90 postponement of the foreclosure if they notified the lender’s attorney they wanted a conference with the lender to discuss foreclosure alternatives.
As anyone who has gone to one of these meetings can tell you, these conferences are a joke because the homeowner usually gets stuck speaking with a hapless lawyer or paralegal from the law firm handling the foreclosure for the lender. The sad thing is, that in the 6 or 7 of these I’ve sat in on, the attorney never allowed an actual representative from the mortgage servicer or the entity holding the note to participate in the meeting.
In one phone conference, Attorney Andrew Wayne (P59398), the attorney for Trott & Trott, even attempted to end the conference call by disconnecting himself from the conference call when my client and his attorney, William Maxwell demanded Mr. Wayne get some one on the conference call from Bank of America who he claimed was the holder of the note. Maxwell had to call the main switch board at Trott & Trott from another line and demand he come back to the conference call. When he returned nearly 25 minutes later and after being pressed by me and by Mr. Maxwell, he soon changed his claim to BAC Home Loan Servicing, LP. This was again incorrect because the holder of the note is actually a Countrywide Asset Backed Security that is currently being sued by it’s investors. Mr. Wayne wasn’t too happy to hear that I knew more about what was going on with his client’s file than he did and that he we caught him purposely misleading us twice.
As horrible as this is, it’s much better than how the attorneys at Orlans Associates handle foreclosures. As some you know I’ve written extensively about them and will be again. Orlans Associates treats MCL 600.3204 and MCL 600.3205 like a mere suggestion not the law. Nearly 75% of my foreclosure clients whose foreclosures are being handled by Orlans have never received any type of notifications prior to Orlans initiating their foreclosure.
As the sunset approaches on the revisions to MCL 600.3204 and MCL 600.3205, the Republican controlled Michigan House is now scrambling to put something permanent in place before the 24 month deadline of July 15, 2011.
Two weeks ago, Michigan state Representative Lisa Posthumus-Lyons sponsored legislation that would keep some of those revisions intact but would eliminate the 6-12 month post-foreclosure redemption period. She claims it would put Michigan in sync with other states and claims this is “a community-friendly bill,”
She was quoted as saying, “…the shortening of the redemption period brings Michigan in line with other states, where the time is anywhere from 10 days to one year. Most have no period at all.“We hope to address the foreclosure issue on the front end,” she said. During the redemption period is when “many homes deteriorate and lose value.”
What Rep. Lyons, who is former Michigan Lt. Governor Dick Posthumus’ daughter, isn’t saying with her Frank Lutz-style word play is that most of the states that have a 90 day pre-foreclosure redemption periods are judicial foreclosure states. This means that a lender has to bring legal action against the homeowner in order to foreclose and the whole foreclosure process is overseen by the courts.
Rep. Lyon’s legislation is only a “community-friendly bill,” if you are a bank or mortgage lender and it’s apparent these bills were written by the banking lobby.
John Llewellyn of the Michigan Bankers Association claims the redemption period “muddies up the water and confuses title.”
After reading about this last week in the Grand Rapids Press, I scratched my head and asked myself if these people live in some type of Ivory Tower on Bizarro World?
A statement like this coming from the Michigan Bankers Association isn’t surprising nor is it unexpected. There is no evidence to suggest that Michigan’s post-foreclosure redemption period has or is contributing to title problems of foreclosed homes.
For three years, I’ve had to endure this same verbal diarrhea from his colleagues in Florida. Like his friends at the Florida Bankers Association, what John Llewellyn doesn’t want to admit publicly is that mortgage securitization and sloppy work done by foreclosure attorneys is what “muddies up the water and confuses title”.
Since this crisis began, banking lobbyists have pointed the finger of blame at virtually everyone else even when every economist and financial analyst around the world has provided empirical proof that banking industry was responsible for this mess. Now even with all the data and proof, the banking lobby continues to pee on our legs and try to convince us its raining.
In Florida, eight different foreclosure firms are under investigation by the Florida Attorney General and the federal government for foreclosure fraud. Of the eight firms, one has been forced to shut down leaving 100,000 foreclosures in legal purgatory and another is being being sued by three of it’s mortgage servicing clients.
Unlike John Llewellyn, I didn’t expect to hear such comments from the daughter of one of Michigan’s most respected elder statesmen. So I did some digging and found that of the nearly $68,000, Rep. Lyons raised to get elected last year, $60,000 came from Corporate Lobbyists. This in itself isn’t really that big of deal since most Republicans for the Michigan House and Senate get these types of contributions just like Democrats get sizable contributions from Pro-Labor Interest Groups.
However, what is shocking is that Rep. Lyons received $10,750 from groups connected to Real Estate and Banking. The same people who would greatly benefit from her legislation.
The Realtors PAC gave her $5000, Raymond Kisor, a Real Estate Broker with Collier International gave $500, Michael MCGraw, President of Eastbrook Homes gave her $500, and Tracy Bryne from the Realtors PAC of Michigan gave her $150 with the Rental Property Owners Association giving her $500. These contributions gave a total of $6,650.00.
She also received $3250 from the Michigan Bankers Association, Comerica Bank gave her $400, Michael Price, CEO of Merchantile Bank(who’s bank received a TARP bailout) gave her $200 and Bank of America gave her $250.
These groups would reap huge benefits from this legislation because it would speed up the foreclosure time and allow a foreclosure attorney time to cover up any problems with faulty mortgage assignments, title issues or securitization issues on behalf of their client. Realtors would benefit because from contracts from selling the foreclosed homes.
There is a reason why Michigan Foreclosure Mills are creating or buying title companies and real estate companies. Last July, Trott & Trott bought Phillip Greco Title. Weir Manuel Realtors and Coldwell Banker Schweitzer, located in suburban Detroit. David Trott wants to control the entire post-foreclosure process and address any title or mortgage assignment issues that his firm may have created. By buying a title company and a real estate franchise, he can hide it from the public.
When I was active in politics, I learned that there is no such thing as a coincidence. Coming from a political family and being a former Public Policy Director aka Lobbyist for the Grand Rapids Association of Realtors, Rep. Lyons, knows how both the political system works and the dynamics of how real estate and foreclosures work in Michigan. She knows what the problems are facing homeowners. She knows that this legislation makes it easier for lenders and their attorneys to foreclose on properties when they may lack the legal standing to do so and to hide these problems from the public. Because of her background, she can’t claim ignorance or naivety like most politicians on this subject.
So the question becomes, where does your loyalty lie, Rep. Lyons? Is it with your struggling constituents who voted for you because of respect for your father or with the lobbyists who bank rolled your campaign?
Via MFI Miami