Will Trott and Trott block foreclosure relief?

Foreclosure sign in front of a home in Michigan (Photo: Todd A. Heywood)

With Michigan rated fifth in foreclosure rates among states and Detroit as 10th in foreclosures in metro areas, Gov. Jennifer Granholm is preparing to use the bully pulpit of her State of the State address on Tuesday to call for relief for distressed homeowners.

According to state Rep. Andy Colouris, Granholm will call for swift legislative action to keep more people in their homes. Colouris, chair of the House Banking Committee, says he will meet this week with colleagues to begin to draw up such legislation.

“The bottom line is I want to be moving on the legislation — even without a bill in hand — so that when we have an agreement, we have language to plug in,” Colouiris told Michigan Messenger. “I don’t want to wait.”

But Colouris and other advocates of foreclosure relief worry that legislation could meet the same fate as a Granholm-backed bill during the Legislature’s lame duck session in December. The Home Foreclosure Prevention Act, which would have given homeowners more time and opportunity to negotiate a settlement with lenders before foreclosure proceedings, met an extended demise. It was approved by the Democratic-controlled House, significantly rewritten in the Republican-controlled Senate and then sent back to the House, where it died.

Former House Majority Leader Steve Tobocman and allies charge that the legislation was killed by the influence of Trott and Trott, the Farmington Hill-based law firm that handles the paperwork for thousands of foreclosed homeowners. The firm and a handful of companies owned by David Trott, a prominent Republican Party fundraiser, have enjoyed a booming business as foreclosures have spread across the state in the last three years.

In a clear reference to the firm, Colouris told Michigan Messenger, “We cannot have legislation written by an organization which stands to make money off the status quo.”

That’s exactly what happened last year, according to Tobocman. He says Senate Banking Committee Chair Randy Richardville allowed Trott and Trott to rewrite his bill.

“I went to the hearing to testify about the bill,” Tobocman said, “only to find there was a new version. The Chair [Richardville] said he had rewritten the bill with the assistance of Trott and Trott, whom he referred to as experts in foreclosure.”

“They opposed this (House legislation) to the very end,” Tobocman said of Trott and Trott.

Richardville’s bill “differed in significant ways from the affirmative consumer protections we had established,” he went on. “Consumer needs did not seem to be the focus of the Senate.”

Richardville did not return phone calls seeking comment.

Phone calls and a fax requesting comment from Trott and Trott were not returned.

Tobocman said House Democrats let the Senate-approved bill die in hopes of a resurrecting legislation more along the lines of his original.

“I made the decision to pull the bill and let it move in the next session,” Tobocman said.

With Tobocman turned out of office by term limits, Colouris is taking the lead in helping distressed homeowners.

“I think we need to get moving now,” he said.

Whether Republicans can block the Democrats again is shaping up as a test of Trott’s influence. Trott has made a name for himself in Republican Party politics in recent years, raising a quarter of million dollars for John McCain’s presidential campaign and hosting McCain’s campaign headquarters in his new office complex in suburban Detroit. He has also donated generously to Republican legislative candidates, especially in the state Senate. Public records show that Trott has given $10,000 to the GOP’s Senate Republican Campaign Committee in each of the last four years.

Another legislator, Sen. Hansen Clarke, says Trott and Trott also tried to discourage him from filing a foreclosure relief bill last year. Clarke said Trott representatives met with him to discuss his foreclosure moratorium bill.

“I think the firm was trying to discourage me,” Clarke said. That bill died in the Senate Banking Committee without ever having a hearing.

“They’re doing what they’re hired to do,” Clarke told the Messenger. “I think it’s awful, the impact they represent.”