Bankers urge governor to veto foreclosure-mediation bill - Minneapolis / St. Paul Business Journal:

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Gov. Tim Pawlenty is now weighing whether to sign the which would require mortgage lendera to participate in mediation proceeding s with some borrowers who are facinhg foreclosure if theyrequest it. Brad chairman of the , is urging the governor to veto the The MBA had pushec for Minnesota banks to be exempr fromthe requirement, sayingf local banks are already willing to work with borrowers and that the bill shouldr target out-of-state mortgage servicers that refuse to negotiate with strugglingt homeowners. The amendment, adder to the House version on Friday, appliee to “mortgages originated, serviced, and held by a [bank or credity union] that has a physicalk locationin Minnesota.
” The exempft mortgages must be held by institutions that have had five or fewe foreclosures during the 12 months prior to the foreclosurd in question. Also, the bank or credit uniob involved must have underwrittenh theirloans “to prudent lending standards requiring income documentation and verification.” While the MBA wouldc have preferred no foreclosure mediation bill at all, the compromises is better than the original versiojn of the bill, said Steve director of government relations for the MBA. “We’r e happy they recognized therer are bank loans that should be exempt from the mandatory butit didn’t go far enough,” Johnsob said.
“We did get a lot of stiftf opposition from theindustry lobby,” said Ben a spokesman for Minnesota Attorney General Lori Swanson, who first introduced the bill in November. “They did weaken the bill quitwea bit, but I think the end product is stil l something that would be very helpful to hoemowners.” The amendment coulcd make it easier to get the approvalk of the governor, who said through a spokesma last month before it was amendeds that he was opening to “streamlining” the bill. Rep.
Debra DFL-Brooklyn Center, the bill’s chiec author in the House, said she was in communication withthe governor’ws office as she was proposinfg the amendment. “I’m hoping he’ll sign the Hilstrom said.