And in Minnesota, the system isn't just broken, it's crumbled to the ground.
In Minnesota late last year they held a conference called, “Fixing the Foreclosure System,” where industry leaders got together to discuss their ineffective foreclosure laws.
In 2004, a new law was enacted that included things like creating an 82 percent of value minimum as the price investors had to pay to transact with individuals in foreclosure.
And the result?
No investors to be found
And, for the record, after 2006 it gets much worse.
Turns out when you take investors out of the marketplace by creating laws that impede free enterprise, things break down. And in Minnesota, the system isn’t just broken, it’s crumbled to the ground.
Take Hennepin County, please.
Since 2004, when the new system kicked in, foreclosures there have almost quintupled. Yes, I understand foreclosures are up everywhere, but by a factor of five? That, Rob, doesn’t happen by accident.
It happens when well intended though ill-conceived laws make it impossible for people in foreclosure to transact. So, by attempting to fix the system, these laws condemn it and the people caught up in it to certain failure.
Just like in Minnesota.
And now, just like in Washington.
Success leaves clues
Were I to take on the task of creating an effective new system to deal with a problem, the first thing I’d do is look to see what’s working elsewhere and consider modeling that system.
Just as important, I’d look at what’s not working and do everything possible to avoid doing anything close to it.
How to fix our foreclosure system here in Washington?
You can be sure an October 2007 Fixing the Foreclosure System summit in Minnesota would have been a good reason to take Minnesota off my list of possible model candidates.
Call it a clue.
The model system
So, readers, whose model have we emulated?
I’ll let Rob tell you . . .
It’s not a new idea. Ahhh, it is a bill that, ugh, was copied after a statute in Minnesota that was adopted in 2004 . . .— Attorney General Robert M. McKenna
KUOW Radio, March 9, 2008
Yes, as incredible as it seems, the Office of the Washington State Attorney General has created our own new foreclosure laws based on the Minnesota statutes so fatally flawed that when implemented, foreclosures in some areas increased by a factor of five.
Getting a new foreclosure bill before the legislature and taking credit for protecting homeowners in foreclosure was the agenda. It is, after all, an election year.
But getting it right, clearly, wasn’t on the list of things that mattered. Had it been, we wouldn’t be modeling the very Minnesota statutes that virtually everyone acknowledges do not work.
Probably time to pencil in our own Fixing the Foreclosure System summit, Rob. Put me down for front row seats.
In the arena,