Tennessee Legislative Information

Two Nashville area legislators are moving to slow down the foreclosure process. In two separate bills, both submitted in the first week of the new legislative session, Rep. Brenda Gilmore of Bordeaux and Rep. Gary Moore of Joelton are proposing drawing out the foreclosure process over several more months, a move that each says will give borrowers a better chance.

How much longer depends on the legislature. Gilmore's measure, House Bill 49, would increase the notification time to 60 days from 20 days, and it would let borrowers initiate a negotiation period of as much as seven months during which a lender couldn't foreclose.

Moore's proposal, House Bill 99, would simply increase the notification time to 90 days, without any other conditions.

Still, Moore anticipates opposition from bankers and others in the mortgage industry.

"They'll be coming," he said. "Their lobbyists, I don't see them being for it."

The main problem with a longer foreclosure period is that lenders already wait until a borrower has fallen at least three months behind on their payments before they start foreclosure, said Scott Ractliffe, president of the Tennessee Mortgage Bankers Association.

Drawing out the process would do little to help people who owe so much get back on track, and it might even lead banks to start proceedings sooner, he said.

Political future is uncertain
The banking industry's opposition isn't the only peril the bills face. They might also get sucked into the vortex of bills that in any legislative session never see a committee vote.

Avoiding that fate will require a balance of power in the state House of Representatives that tilts in their favor. Gilmore and Moore are both Democrats, and only Gilmore sits on the Commerce Committee, to which the legislation will probably be assigned.

The decision whether to bring up either bill will be made by new Speaker Kent Williams, a Republican who won with the support of Democrats, and the committee chairmen, who might come from either party depending on how the turmoil at the Capitol plays out.

Both Gilmore's and Moore's bills would go into effect as soon as passed into law. But with the legislature so roiled by more basic issues, Tennessee borrowers who are behind on their mortgages shouldn't expect a reprieve anytime soon.