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Tues: Crossover minus 2
posted at 2009-05-13 00:21 | Last modified 2009-05-13 00:26
Think losing your home to foreclosure is about the worst thing that could happen to you? Think again. The House did just that today when it passed H1057, a measure to protect predatory loan victims from some post-foreclosure lawsuits.
Suppose the bank forecloses on your $150K mortgage, but when your house is sold, it brings in only $120K. Who’s liable for the $30K difference? That’d be you, the borrower. It’s called a "deficiency judgment," and it can stay on your record for 10 years -- 20 if it gets renewed.
In most cases, these judgments aren't large, because most banks won’t lend much more than they think they could raise through foreclosure, and also because they'll often accept a short sale settlement if the loss is less than the legal costs to pursue the deficiency. But for subprime or predatory mortgages, all bets are off. That’s because high rates and fees often inflate those loans far beyond the actual value of the property. Al Ripley is with the NC Justice Center.
"You're looking at an incredible burden that's being placed on people that've been victimized by predatory lending. Not only to lose their home, and be foreclosed on, and have a foreclosure on their record, but then to have a deficiency judgment against them that they'll have to pay or deal with sometime in the future - it's really hard."
The bill still allows lenders to take back property in foreclosure, but they couldn’t sue borrowers for the remainder if the loan was predatory – and they also couldn’t sell the deficiency debt to a third-party collection agency. Critics say the change will make banks less willing to lend to consumers with less than optimal credit. The bill now goes to the Senate.
Racial Justice
After a couple of sessions spinning its wheels, the Racial Justice Act (H472/S461) won hearings today in both House and Senate J1. The House vote was close – 6 to 5 – while the Senate margin was a lot healthier.
The legislation would allow capital defendants sentenced to death to appeal to commute their sentences if they can prove racial bias through witness testimony, voir dire irregularities, or statistical evidence of systemic sentencing disparities in the jurisdiction or in the state as a whole. If a judge agrees that race played a significant factor in sentencing, the defendant would receive life in prison without parole instead of death.
Charmaine Fuller with the Durham nonprofit Carolina Justice Policy Center says the change would provide one more safeguard.
"If your skin color is a little bit darker than someone else’s, your chances of dying are three and a half times greater... That’s a problem within itself."
You can hear more from Fuller here. (1:13)
Listen Now!
House Minority Leader Skip Stam spoke against the bill. He says its statistical test can’t be borne out by the small number of capital cases in the state every year. He argued that current law already allows defendants to appeal on the grounds of discrimination. And, most importantly, he says it goes against the American court system’s tradition of giving individual circumstance precedence over demographics.
The measure is scheduled for debate in both the House and Senate Wednesday.
Best Line of the Day
"Does the gentleman from Transylvania have a comment?”
Otherwise:
The Cement Plant Moratorium and Study (S699) was pulled from Sen Env. today. Sponsor Julia Boseman (D-New Hanover) says pro-industry lobbyists are putting up a tough fight, but she’s determined to get it rescheduled in time for Thursday’s crossover deadline.
The Restore School Calendar Flexibility Bill (H1306) wound up turning into a study bill in House Educ. I’m sure it’s just a coincidence that today was Tourism Lobby Day.
McKissick’s animal shelter overcrowding bill (S467) got the old "fiscal note" smackdown today from Finance co-chair Clark Jenkins after other senators voiced concerns about its cost to local governments. Smart money says Fiscal won’t get that note out in time for crossover. In fact, I hear that’s been a constant issue in the Senate this session. Bills that are favored by the leadership get fiscal notes almost immediately, while less-favored bills can languish in limbo for a month or more.
The Senate won the annual Pit Crew Challenge today, but only after some shenanigans on both teams. First, the Senate got to “borrow” a professional member after one of their team no-showed. Then the House almost caught them in Round 2, anyway, after coach Bonner Stiller stepped on the Senate’s air hose to slow things down. But once contest officials sussed out the interference and banned Stiller from the arena, the Senate sailed to an easy victory in the third round.
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