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Minnesota Bill Aims To Prevent Some Foreclosures

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Feb 22, 2009 12:38 pm US/Central

Minnesota Bill Aims To Prevent Some Foreclosures

ST. PAUL (AP) ― A bill that would force mortgage lenders into negotiations with struggling homeowners gets its first look in a Minnesota Senate panel on Tuesday.

The Homeowner-Lender Mediation Act would prevent some foreclosures by giving homeowners another chance to work out loan terms.

The bill would require lenders to negotiate interest rates, principal and repayments periods with interested homeowners before foreclosing on homes.

The Senate Committee on Commerce and Consumer Protection will hear the bill sponsored by its chairwoman, Sen. Linda Scheid. Attorney General Lori Swanson modeled the proposal on a farmer-lender mediation law from the 1980s farm crisis.

Mortgage industry representatives say it will be difficult to determine who has ownership to renegotiate mortgages that have been securitized and sold to multiple investors.

(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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