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Court pilot programs boost foreclosure conferences

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Foreclosure rates have remained at record highs for Indiana the past few years, and a court program to help homeowners hasn't been as successful as hoped. That's now changing.

Court employees find it troubling that only a small number of eligible homeowners have participated in settlement conferences to save their homes. But one court's pilot program to improve how it communicates with borrowers may help. By being more aggressive in letting borrowers know their options to at least try to save their homes has already had success in getting more people to request settlement conferences.

Statewide, only 2 percent of homeowners facing foreclosures have requested settlement conferences under the state statute that went into effect in July 2009.

But after implementing a few changes to how most courts around the state were handling settlement conferences, a pilot program in Allen County that started in February has already seen a significant increase in the number of requested settlement conferences. Other counties are hoping for similar success rates, according to an announcement April 20 from the Indiana Supreme Court and Indiana Foreclosure Prevention Network.

In the courtroom where Allen Superior Judge Nancy Eshcoff Boyer started the pilot project, Lt. Gov. Becky Skillman discussed these new efforts. The project has court staff directly contact defendants in foreclosures to let them know what a settlement conference is, including what is expected of borrowers.

That court is also doing more to get lenders and servicers to participate in settlement conferences in good faith, including the assignment of one point person on the loan servicer's end who will shepherd the borrower's case so the borrower can have realistic options if he or she is eligible for a loan modification, Judge Boyer said.

The Indiana Housing and Community Development Authority worked with the Supreme Court to determine which counties have the greatest need and are most willing to try the program, said Kathryn Dolan, spokesperson for the Supreme Court.

Other counties that have signed on include Marion and St. Joseph, which started similar programs in their courts in April, and Monroe County is on track to start a program this summer. Programs will be targeted to the needs of the individual counties and geographic regions.

For instance, each court can decide who will contact the borrowers.

In Marion County, a law student is paid a nominal fee to be the logistical coordinator to oversee settlement conferences for foreclosure cases that have been filed in the courtrooms of Superior Judges Cynthia J. Ayers and David J. Dreyer, and Circuit Judge Louis F. Rosenberg.

Judge Ayers said the logistical coordinator sifts through the cases filed in those three courts to determine who is eligible to participate in settlement conferences, which are available only to those who may lose their primary residence and have not yet had a settlement conference.

The logistical coordinator then contacts those parties by letter that a phone conference has been arranged and that they need to have certain financial documents assembled for that phone conference.

The Allen County pilot program is similar, only someone on the court's staff makes the contact because they have chosen not to hire a logistical coordinator.

In both counties, someone will sift through foreclosure cases to find those who are eligible for settlement conferences. They will then notify the borrowers by phone of a preconference, which is the borrower's chance to request a settlement conference and where the homeowner can learn what is needed for a settlement conference in terms of financial documents and other information.

In the past, a homeowner would receive notice of this option, but it would be among a stack of other papers from the lender, often at the bottom of the stack or mixed in with other paperwork.

Even having the courts contact the borrowers directly will make a difference, said Stephanie Reeve, manager of the Indiana Foreclosure Prevention Network.

"According to the new law that went into effect last July, at least 30 days out the lender needs to send a presuit notice. In that notice, they need to include a notice of the borrower's right to request a settlement conference. I noticed IFPN's volume of calls skyrocketed around that time, but only from people when they received presuit notices. The stack of documents they receive when they are foreclosed on is scary and it's written in legalese so they usually don't get that far down. We're also working on making notices more user friendly for the borrowers."

She said she was optimistic about the pilot programs.

"I think settlement conferences and what IFPN has been doing offer the best opportunity for homeowners to come to a resolution. I'm just hoping they'll take advantage of it," she said.

She and others interviewed for this story said they were encouraged by numbers from Allen County.

Of 66 phone conferences set from the start of the program in February until April 20, 29 did not take place, but of those 29 borrowers, five cases had already been worked out in some way, according to statistics reported to the Indiana Supreme Court from Allen Superior Court.

Of those who did call about the program, two borrowers were not eligible, one borrower was eligible but did not request a settlement conference, and the other 34 requested settlement conferences.

Judge Boyer said whether one considers the success rate to be 34 requests out of 66, or 51 percent requesting settlement conferences, or the number of those who actually called and requested settlement conferences, 34 out of 37, or 92 percent, "it's a whole heck of a lot better than 2 percent."

As a result of the telephone conferences, 17 settlement conferences have been set.

"Out of 17, there was as no agreement in two cases, five cases where an agreement was reached and the foreclosure suit was dismissed, and 10 negotiations are continuing," she added.

The five cases that resulted in success included four stay-in-home workouts from adjustments of the terms of the mortgage, and one short sale.

While the cases are considered successful, Judge Boyer said the system itself is difficult to navigate. She said she had heard of cases from facilitators where someone who thought they had a workout later learned that it wasn't communicated to the right person and the foreclosure proceeded even after an agreement was reached at a settlement conference.

While Allen County has had attorney facilitators working as neutrals on settlement conferences since last year, those who've done settlement conferences in Marion County courts have not had neutrals and rarely have attorneys for the borrowers. They will now have facilitators for all settlement conferences, Judge Ayers said.

Facilitators will be paid from a $50 filing fee the Supreme Court recently implemented for all foreclosure filings. After handling at least one block of four settlement conferences for no fee, facilitators can be paid $150 for each block of four settlement conferences they handle.

While Judge Boyer said her court would prefer to have attorneys help as facilitators instead of representing borrowers, Marion County is encouraging attorneys to be facilitators or take on clients and is offering a rate of $25 per settlement conference plus some expenses like parking after they take on a couple cases for no fee.

The system itself may not change overnight, Judge Boyer said, but seeing the program in her court has helped her understand what is working and what isn't.

Because it is a pilot program, she said she has the capability to adjust the way settlement conferences are handled, including how the lenders and borrowers communicate after reaching an agreement. For instance, she said she was considering adding a status conference to her calendar following the settlement conference.

"I will ask facilitators when they have the next round of settlement conferences to ask the servicer and plaintiff's attorney how much time it'll take to process the results. If they say 30 days, then I'll set a status hearing 30 days out to see where things stand at that point," she said.

And while the whole process can be overwhelming, she said, "I'm still hopeful."

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  1. I have been on this program while on parole from 2011-2013. No person should be forced mentally to share private details of their personal life with total strangers. Also giving permission for a mental therapist to report to your parole agent that your not participating in group therapy because you don't have the financial mean to be in the group therapy. I was personally singled out and sent back three times for not having money and also sent back within the six month when you aren't to be sent according to state law. I will work to het this INSOMM's removed from this state. I also had twelve or thirteen parole agents with a fifteen month period. Thanks for your time.

  2. Our nation produces very few jurists of the caliber of Justice DOUGLAS and his peers these days. Here is that great civil libertarian, who recognized government as both a blessing and, when corrupted by ideological interests, a curse: "Once the investigator has only the conscience of government as a guide, the conscience can become ‘ravenous,’ as Cromwell, bent on destroying Thomas More, said in Bolt, A Man For All Seasons (1960), p. 120. The First Amendment mirrors many episodes where men, harried and harassed by government, sought refuge in their conscience, as these lines of Thomas More show: ‘MORE: And when we stand before God, and you are sent to Paradise for doing according to your conscience, *575 and I am damned for not doing according to mine, will you come with me, for fellowship? ‘CRANMER: So those of us whose names are there are damned, Sir Thomas? ‘MORE: I don't know, Your Grace. I have no window to look into another man's conscience. I condemn no one. ‘CRANMER: Then the matter is capable of question? ‘MORE: Certainly. ‘CRANMER: But that you owe obedience to your King is not capable of question. So weigh a doubt against a certainty—and sign. ‘MORE: Some men think the Earth is round, others think it flat; it is a matter capable of question. But if it is flat, will the King's command make it round? And if it is round, will the King's command flatten it? No, I will not sign.’ Id., pp. 132—133. DOUGLAS THEN WROTE: Where government is the Big Brother,11 privacy gives way to surveillance. **909 But our commitment is otherwise. *576 By the First Amendment we have staked our security on freedom to promote a multiplicity of ideas, to associate at will with kindred spirits, and to defy governmental intrusion into these precincts" Gibson v. Florida Legislative Investigation Comm., 372 U.S. 539, 574-76, 83 S. Ct. 889, 908-09, 9 L. Ed. 2d 929 (1963) Mr. Justice DOUGLAS, concurring. I write: Happy Memorial Day to all -- God please bless our fallen who lived and died to preserve constitutional governance in our wonderful series of Republics. And God open the eyes of those government officials who denounce the constitutions of these Republics by arbitrary actions arising out capricious motives.

  3. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

  4. "Meanwhile small- and mid-size firms are getting squeezed and likely will not survive unless they become a boutique firm." I've been a business attorney in small, and now mid-size firm for over 30 years, and for over 30 years legal consultants have been preaching this exact same mantra of impending doom for small and mid-sized firms -- verbatim. This claim apparently helps them gin up merger opportunities from smaller firms who become convinced that they need to become larger overnight. The claim that large corporations are interested in cost-saving and efficiency has likewise been preached for decades, and is likewise bunk. If large corporations had any real interest in saving money they wouldn't use large law firms whose rates are substantially higher than those of high-quality mid-sized firms.

  5. The family is the foundation of all human government. That is the Grand Design. Modern governments throw off this Design and make bureaucratic war against the family, as does Hollywood and cultural elitists such as third wave feminists. Since WWII we have been on a ship of fools that way, with both the elite and government and their social engineering hacks relentlessly attacking the very foundation of social order. And their success? See it in the streets of Fergusson, on the food stamp doles (mostly broken families)and in the above article. Reject the Grand Design for true social function, enter the Glorious State to manage social dysfunction. Our Brave New World will be a prison camp, and we will welcome it as the only way to manage given the anarchy without it.

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