MINUTES

LEGISLATIVE COMMITTEE

COLORADO PUBLIC TRUSTEES ASSOCIATION (CPTA)

Adams County Public Trustee’s Office

Brighton, CO

January 8, 2010

ROLL CALL

Members Present:        Bob Sagel, Chair         Carol Snyder               Dee Ann Stults

                                    Patty Bartlett              Billie Mills                   Sandra Berry              

Tom Mowle                 Debby Morgan            Jim Covington

Susie Velasquez          Ana Maria Peters-Ruddick

                                    Margaret Chapman (by phone)           Pat McFarland (by phone)

Others Present:            Diana Springfield        Tom Hill                      Sindee Wagner (by phone)

Members Absent:        Christina Whitmer       Michelle Miller

DISCUSSION ITEMS

·         Abandoned Properties ( Kerr, House Bill draft)

House Bill concerns the regulation of abandoned property by a board of county commissioners.  There is no power to regulate property in some counties.  There are abatement/nuisance ordinances to deal with these types of issues.  This bill does not require the Public Trustees to do anything.  The Public Trustees will monitor and clarify the bill, if necessary, in testimony, to assure that all parties understand the role of PTs and that PTs are not the appropriate parties to "register" or "maintain" properties while they are in foreclosure.

·         Fiscal Note -  (House Bill)

This House Bill concerns the disposal of business records containing personal identifying information.  A concern is that the Public Trustees do not exclusively control them but may be subject to penalty.  The Public Trustees will monitor this bill and provide fiscal information.  Costs for burning, burial, etc., other than shredding, is not known.  Before documents are shredded, information must be redacted.  This will have a fiscal impact on the Public Trustees.  Carol & Bob plan to contact the fiscal person to let them know that the Public Trustees cannot put a dollar amount on the fiscal impact. 

·         HOA Liens  - “Lien Rights During Foreclosure”

This Senate Bill draft concerns the orderly resolution of claims in foreclosures involving junior liens.  Public Trustees are concerned about public policy implications.  Homeowners Associations (HOA) are making a lot of money selling the liens to the highest bidder, a windfall to the HOA.  For example, investors can go to a firm and pay $5,000 - $6,000 for a $1,000 lien and then file Notice of Intent only on the junior portion.  Certificate of Purchase (COP) holder and lienor disagree and then they try to put the Public Trustee in the middle of it.  Sponsor of the bill wants the COP holder to pay off junior lienor before redemption and require lienor to take payment and not redeem.  According to 90 years of case law, redemption rights cannot be frustrated.  The HOA is the personal liability of the homeowner so the COP holder finds the homeowner and has the homeowner sign Power of Attorney for the COP holder to extinguish redemption.  This bill has the potential to make the HOA lien worthless.  The public policy issue is ‘Do you frustrate the right to redeem?’  This bill would put the Public Trustee in the middle by having money paid to the Public Trustee and then having the Public Trustee transfer the money to the junior lienholder.  The Public Trustees do not want to be put in the middle.  A suggestion was to get rid of redemption by transferability of HOA liens.  There can be no redemption if the HOA lien is assigned.  Another suggestion is to push HOA into priority position, make all of it a super priority in the Colorado Common Interest Ownership Act (CCIOA) statute.  A concern with the bill is that the junior must accept payment.    This bill will bring these issues to the forefront:  1)  The Public Trustee should not be the escrow agent for the COP holder and junior lienholder.  2) The HOA should not have a windfall by auctioning off liens.  3) The Public Trustees should not agree to a bill that is favorable to COP holder and not lienholder.  This bill appears to be one-sided.  The Public trustees oppose the bill because it is one-sided and there are better ways to handle the lien situation.  Carol will email her comments to Senator Lundberg. 

·         Expedited Foreclosure - “Expedited Residential Foreclosure Sales”

This House Bill draft concerns expedited residential foreclosure sales.  This bill came about from complaints by counties with trashed houses, squatters, meth & crack houses, etc. that have been abandoned.  Colorado wants an expedited process if the property has been abandoned.  The foreclosure should not be able to be continued for one year.  The Public Trustee is to protect borrowers and lenders, not county enforcement.  The motivation behind the bill is the liability since there is not a legal owner until title vests and to stave off ordinances.  The alternative would be more ordinances like Aurora passed.  A foreseeable problem is that all junior lienors must be included on the mailing list.  The Public Trustees will incur additional costs with this bill for new sale, publications, forms, calculations, new deadlines and training for Public Trustees.  GTS needs 90 days minimum to implement changes.  If a foreclosure is expedited then any re-start would also be expedited.  Time frames and volume issues are a problem for the bigger counties.

·         Deferment – HB 09-1276

There are a number of issues with this bill and there is an attempt to fix the ambiguities.  The Division of Housing should have rulemaking ability.  There are issues regarding posting.  There must be no early posting.  Personal service by handing to the homeowner, without actually posting on the door, can be done. 

Respectfully Submitted

Susie Velasquez