December 16, 2008

December 16, 2008

The Honorable Thomas W. Corbett, Jr. Attorney General, Commonwealth of Pennsylvania Office of Attorney General Strawberry Square Harrisburg, PA 17120 Dear Mr. Attorney General: Please accept our sincere congratulations on your recent reelection. We look forward to working with you and your staff in the coming years on issues of mutual importance, and would like to share with you our concerns about a serious consumer protection matter, of which you may already be aware. As you know, the United States Treasury Department is in the process of developing procedures and regulations for buying distressed mortgages under its Troubled Asset Relief Program, known as TARP. Guidelines for managing the assets are required under the law but have yet to be published. Treasury officials last year announced plans to acquire various financial instruments with mortgages wrapped in them and, we note here, are developing guidelines for accomplishing that goal. Our industry is concerned that officials will attempt, by fiat, to ignore the 50 state foreclosure laws that are now in effect, and unilaterally post “notice” of the move on their Treasury website, with no publication or actual notice given to consumers who may lose their homes. Newspaper public notice is the traditional path for reaching the local community affected by the action detailed in the notice, be it a court or civil matter, or a pending government decision. In the case of foreclosures, public notices supplement the individual notice sent by mail or hand-delivered to the borrower, but with the purpose of notifying the interested public that something is happening, something important. Foreclosure notices highlight such crucial factors as commercial lending patterns and neighborhood impacts to the public, and demonstrate fairness in due process. In the case of a sale notice, they also announce where an opportunity to purchase may exist. For the borrower, it introduces a defined period during which he or she may be able to obtain redemption funds and possibly work with friends and family to resolve the problem. It can be helpful in locating missing borrowers, and finally, it increases the possibility of the best sale price, which helps both borrower and lender. According to the Public Notice Resource Center, a nonprofit foundation which studies and tracks notice laws around the nation, public notices embody four key attributes that are crucial for providing an official record: 1) they are published in a medium independent of the entity required to provide notice; 2) they are verifiable as true copies, usually through a publisher’s affidavit; 3) they are archivable in a fixed form so that they will not change over time or become inaccessible because of technological changes; 4) they are accessible to the general public.

The Honorable Thomas W. Corbett, Jr.

December 16, 2008

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You are doubtless aware that our United States Treasury moved last year to Internet-only “publication” for forfeiture notice of goods seized by its agents. Certainly, notice on the Internet, made available through the appropriate vehicle, can provide additional reach. It does not provide reliable verification nor can it be archived, as anyone who has ever found that “the server is down” is well aware. The Internet also fails to reach many populations. Senior citizens, some language minorities, less affluent neighborhood and rural areas do not garner information through the Internet in sufficient numbers to trust that medium to bring reliable notice to all of the public. And according to the Pew Project for the Internet and American Life, regular readership of websites for public business remains low. Most recent reports from May 2008 show that only 14 percent of the public reported visiting a government website on a daily basis. Because property rights are typically defined by state law, the states have long experience in protecting both borrowers and lenders. The existing credit collapse in the United States is causing many states to revisit their foreclosure laws. Pennsylvania law, as you know, provides certain protections for borrowers at risk for foreclosure, such as the requirement that foreclosure procedures be halted if a partial payment is accepted. Similarly, junior lien holders such as condo associations must also receive notice. These consumer protections, mandated by state law, are strengthened by newspaper publication, but vulnerable and weakened on a government website. As the United States Treasury Department acquires various financial assets—from whole bank portfolios to collateralized debt obligations—the federal government is set to play a role in the handling of foreclosures. The federal role should respect states’ rights in handling foreclosures. A federal receiver, trustee, or agency should work with various servicing entities, including state press associations that handle newspaper advertising placements, to ensure that proper newspaper notice is given in a foreclosure process. The federal government specifically should not be tempted to handle public notice through an official website, and call it done. A government website is never a viable substitute for a proper notice of record. We enclose for your review a copy of correspondence raising these concerns from Attorney General Patrick C. Lynch to the Honorable Neel Kashkari, Interim Assistant Secretary of the Treasury with responsibilities in this important matter. We respectfully request that you join General Lynch in sharing these concerns with Treasury officials, to avoid preemption of newspaper publication of foreclosure notices. Should you have any questions, please do not hesitate to contact Deborah Musselman, Director of Government Affairs, at (717) 703-3077, or [email protected], for any further information that you may need. We appreciate your attention to our concerns, and hope to hear from you soon. Sincerely,

Sandra C. Hardy, Chairman Pennsylvania Newspaper Association Vice-President, Calkins Media

Timothy M. Williams President Pennsylvania Newspaper Association

Enclosure cc:

Sen. Arlen Specter Sen. Robert P. Casey, Jr. Pennsylvania Newspaper Association Board of Directors