DON’T MESS WITH FORECLOSURE NOTICES
If lawmakers are truly conservative, why would they be trafficking with a bill that would increase the size of government, hurt small businesses and cause more people to lose their homes?
Those would be some of the results, we believe, of a bill introduced this year in the Tennessee legislature that would, beginning in 2025, forego the requirement that public notice for a foreclosure sale of property must be published in a newspaper.
The measure, instead, says public notice would be satisfied if the foreclosure sale is published on the website of the secretary of state. In our thinking, the passage of such a bill would:
1. Increase the size of government because the secretary of state’s office inevitably will have to hire multiple staff members to handle the creation, maintenance, accuracy and archiving of the website pages about the notices, the questions from homeowners, family members and other concerned parties about the properties in question, and the legal liabilities that result from the notices (now assumed by newspapers). The bill foresees the hiring of only one permanent staffer.
2. Hurt mostly family-owned small businesses in the state because it would remove a significant source of revenue from the newspapers that have for decades efficiently published the notices. If small newspapers are forced to go out of business because of a dearth of advertising, the town or region would lose a source of a variety of information and, in many cases, a watchdog over public entities.
3. Cause more people to lose their homes because the scope of notification of such sales would be reduced from what is now print newspapers, online news sites, a centralized statewide website and database, mail notification, and more, to mail and the secretary of state website. Tennessee newspapers reach more than 1.2 million people daily, including many who have no internet access to reach the secretary of state’s website.
Opponents of the bill say removing the notices from newspapers also ultimately helps mostly large, corporate banks centered outside of Tennessee who are little concerned with the individual mortgagee.
Further, it gives state government new power, a new source of revenue and by the secretary of state creating a website and collecting fees for foreclosure notices, it in fact creates direct competition between the state and private businesses.
The bill sets a $200 cost per posting on the secretary of state’s website, and its fiscal note indicates the state would reap $488,900 in fiscal 2024 and nearly $1 million in fiscal 2025.
Meanwhile, according to bill opponents, the average cost of a foreclosure notice in a newspaper is $200.
The Tennessee Bankers Association pushing the bill, in an explanation on its website, miscasts newspapers as “an increasingly outdated and ineffective method of distributing information to the public” and “no longer the best, most accessible source for public foreclosure notices,” but conveniently overlooks the significant online reach of the newspapers and a centralized state
website of foreclosure notices (tnpublic notice.com, sponsored by the Tennessee Press Association) that already exists.
In 2011, two Hamilton County lawmakers offered a bill about all legal notices being printed in newspapers at the behest of then-Chattanooga Mayor Ron Littlefield.
Frank Gibson, with the Tennessee Coalition for Open Government at the time, said by posting legal notices on government websites as the bill sponsored by state Sen. Bo Watson, R-Hixson, and then-state Rep. Vince Dean, R-East Ridge, would have done, “you don’t have the protection of being able to verify that something appeared when it was supposed to appear, and it’s essentially letting the government post notices when they want to.”
The bill was one of several in the legislature that year dealing with the requirement of printing of legal notices in newspapers. Among them was a measure being pushed by the Tennessee Bar Association and Tennessee Bankers Association that would — just as in 2023 — allow advertising of foreclosure notices on the Tennessee secretary of state’s website.
That didn’t happen 12 years ago, but a compromise reducing the number of legal notices that would be printed in state newspapers was struck.
Because of newspapers’ wide reach and the already existing centralized public notices state website, we don’t see a need for duplication with the secretary of state website. And when you add the ways in which such a change would be antithetical to conservative government, it becomes evident the bill is unneeded. But in case one more reason is necessary, consider this: The state bankers association, when asked how it would market the new secretary of state website if the bill were to pass, named newspapers because they reach the target market.
Go figure.