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The Journal Gazette

Wednesday, December 02, 2015 11:50 am

Meetings that help families keep homes at risk

The home foreclosures brought on by the Great Recession meant disruption and pain into many, many lives. People were humiliated, uprooted, forced to change jobs, schools and neighborhoods. Some had to leave their city or their state.

Those whose homes were in jeopardy often struggled simply to communicate with faraway financial institutions. Those institutions, which may have acquired mortgages from other firms hundreds of miles away, were sometimes revoking mortgages on homeowners their representatives may never have met and on homes they had never seen.

But in Indiana, thousands of foreclosures were prevented, and millions of dollars were saved, by a program that now may be jeopardized.

Many homeowners and financial institutions were able to reach far better outcomes after a task force organized by the Indiana Supreme Court in 2010 and 2011 laid out procedures to avert foreclosures by "robosigning."

The law now requires that homeowners facing foreclosure are notified by the courts and are able to deal with one point person from the mortgage-holder. Before anything drastic occurs, homeowners can have a conference with that point person and try to work things out.

Under the Indiana Supreme Court’s Mortgage Foreclosure Trial Court Assistance Project, which was first rolled out in Allen County and other foreclosure-distressed counties, homeowners who request such conferences have the added benefit of a court-appointed mediator.

Between April 2010 and January 2015, the assistance project held 13,341 such conferences in 26 counties. According to Attorney General Greg Zoeller, who helped set up the program, "7,002 of those conferences ended in mutually agreeable settlements or ‘workouts’ of the delinquent mortgage payments. Of those settlements, 6,174 allowed the homowners to stay in their homes."

Each of the prevented foreclosures, the project estimated, saved those involved and their communities between $40,000 and $80,000, according to Zoeller’s office.

But Journal Gazette staff writer Rebecca Green revealed Sunday that a seemingly innocuous and little-discussed bill wending its way through the current legislative session in Indianapolis contained a surprise.

"Tucked inside Senate Bill 415, on Page 55 of a 104-page bill, is a paragraph repealing language" from the law that created the mortageholder/homeowner conferences.

Exactly what that was doing in the middle of a bill that addresses tax sales of vacant and abandoned homes isn’t clear. It may be that the bill’s authors and co-sponsors weren’t aware of the damage that paragraph might do. Certainly those who could have testified in defense of the program don’t appear to have been warned.

Allen Superior Court Judge Nancy Boyer, who handles some of the foreclosure hearings here and is a member of the state task force, told Green she was unaware that such a move was even being contemplated.

An amendment added by Sen. Karen Tallian, D-Portage, before SB 415 passed the Senate may mitigate some of the damage the bill threatens to do. But especially without attention and debate, there’s a danger that phrases may be dropped or reinserted as SB 415 travels through the House.

By far the best course is for the House to remove all mention of the mortgage/homeowner conferences from the measure.

As Zoeller said in a statement released Tuesday, "the worst of the foreclosures may be behind us, but that’s no reason to grow complacent and take away this procedure that provides a measure of fairness for distressed homeowners in dire financial situations."

The attorney general vowed to "aggressively oppose any attempt by the bankers’ lobby to roll back the clock and take away this crucial protection." Maybe some of our legislators with a penchant for fairness and justice could help out with that.