House File 706 - Introduced HOUSE FILE BY COMMITTEE ON VETERANS AFFAIRS (SUCCESSOR TO HF 251) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to and publicizing mortgage foreclosure and real 2 estate obligation protections for members of the national 3 guard, and the reserve or regular component of the armed 4 forces of the United States in active duty service, and 5 providing a penalty. 6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 7 TLSB 2188HV 83 8 rn/rj/5 PAG LIN 1 1 Section 1. Section 29A.102, subsection 3, Code 2009, is 1 2 amended to read as follows: 1 3 3. A person who knowingly repossesses property which is 1 4 the subject of this section, other than as provided in 1 5 subsection 1, commits asimpleserious misdemeanor. 1 6 Sec. 2. Section 29A.103, subsection 4, Code 2009, is 1 7 amended to read as follows: 1 8 4. A person who knowingly forecloses on property that is 1 9 the subject of this section, other than as provided in 1 10 subsection 1, commits asimpleserious misdemeanor. 1 11 Sec. 3. NEW SECTION. 654.17B MILITARY FORECLOSURE 1 12 PROTECTION == NOTICE. 1 13 1. A creditor shall not initiate a proceeding to enforce 1 14 an obligation payable under its terms in installments under a 1 15 contract for the purchase of real estate, or secured by a 1 16 mortgage or other instrument in the nature of a mortgage upon 1 17 real estate, against a borrower, or a borrower's dependents, 1 18 under the following circumstances: 1 19 a. The borrower is a member of the national guard and 1 20 entitled to protection under the Iowa national guard civil 1 21 relief provisions contained in chapter 29A, subchapter VI. A 1 22 creditor who initiates a proceeding in violation of this 1 23 subsection against a borrower specified in this paragraph or 1 24 the borrower's dependent is subject to applicable penalty 1 25 provisions contained in sections 29A.102 and 29A.103. 1 26 b. The borrower is a member of the reserve or regular 1 27 component of the armed forces of the United States in active 1 28 duty service and entitled to protection under the federal 1 29 Servicemembers Civil Relief Act of 2003, 50 U.S.C. app 532 and 1 30 533. A creditor who initiates a proceeding in violation of 1 31 this subsection against a borrower specified in this paragraph 1 32 or the borrower's dependent is subject to applicable penalty 1 33 provisions contained in the federal Act. 1 34 2. The department of veterans affairs and the department 1 35 of commerce shall coordinate to develop a procedure to inform 2 1 or notify members of the national guard, reserve, or regular 2 2 component of the armed forces of the United States, and 2 3 financial institutions as defined in section 12C.1, of the 2 4 protections referenced in subsection 1. The notification 2 5 procedure shall include, at a minimum, posting the information 2 6 on an official internet site maintained by each department. 2 7 EXPLANATION 2 8 This bill relates to a prohibition against repossessions or 2 9 foreclosures on real property owned by members of the national 2 10 guard, or members of the reserve or regular component of the 2 11 armed forces of the United States in active duty service, or 2 12 their dependents. 2 13 Current law affords court=ordered protection against a 2 14 foreclosure or repossession action initiated by a creditor 2 15 against a member of the national guard, and provides a 2 16 mechanism whereby a service member may apply to a court for 2 17 relief from obligations relating to a contract for the 2 18 purchase of real estate or secured by a mortgage or other 2 19 instrument in the nature of a mortgage. Similar protection is 2 20 afforded to members of the regular or reserve components of 2 21 the armed forces of the United States in active duty service 2 22 and protected under the federal Servicemembers Civil Relief 2 23 Act of 2003. 2 24 The bill references both protections in Code chapter 654, 2 25 relating to foreclosures on real estate mortgages, and states 2 26 that initiation of an action which violates the protections 2 27 shall result in penalties applicable in the Code with regard 2 28 to national guard members, or pursuant to the federal Act with 2 29 regard to members of the regular or reserve components of the 2 30 armed forces. The bill increases the penalty applicable to 2 31 actions initiated against members of the national guard from 2 32 the current penalty of a simple misdemeanor to a serious 2 33 misdemeanor. 2 34 Additionally, the bill provides that the departments of 2 35 veterans affairs and commerce shall jointly develop a 3 1 procedure to notify military personnel specified in the bill 3 2 and financial institutions about the protections. 3 3 LSB 2188HV 83 3 4 rn/rj/5