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IBA: Mortgage Foreclosure in Marion County

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By The Hon. Cynthia Ayers

In November 2008, the Indianapolis Bar Association Board of Directors approved a resolution authorizing the formation of a new task force charged with finding ways to confront the explosion in mortgage foreclosures in Marion County. The Indianapolis Mortgage Foreclosure Task Force (IMFTF) was established, comprised of volunteer lawyers, judges, and state agency managers. Members included lawyers from the Indiana Bankers Association, the Attorney General’s Office, Legal Services Organization, United Auto Workers Legal Services, the Indiana Mortgage Foreclosure Prevention Network, the Christian Legal Clinic, HUD, debt management agencies, members of the private bar and other concerned citizens.

The initial responsibility of the IMFTF was to determine the magnitude of the mortgage foreclosure crisis and develop an appropriate action plan. The committee developed ideas on how the bar association might help distressed homeowners and lenders and the entire community as a whole. Members quickly realized that in addition to families facing personal financial crisis, banks were being inundated with foreclosed properties. Empty homes were often magnets for criminal activity and consequently, directly related to rapidly falling home values.

Subcommittees were set up to facilitate a diversified approach to critical issues. Three major objectives were identified: court case-management, with the use of Alternate Dispute Resolution methods to promote face-to-face meetings between borrowers and lenders; education and training of lawyers, to facilitate pro bono representation of homeowners; and collaboration with the Indiana Housing Foreclosure Network, to encourage the referral of borrowers to credit counseling and debt management services.

For years, the Indiana foreclosure process followed a general routine. Initially, the lender filed suit after payments were missed, service was obtained on the defendant homeowner, the appropriate pleadings were presented timely to the court, and if done properly, default judgment was entered. Next, the defaulted borrowers either voluntarily left or stayed in possession until evicted after a Sheriff’s Sale. As the economic crisis worsened nationwide, it became increasingly apparent that an opportunity for settlement discussions may be a better approach for all parties. Based upon success in Pennsylvania, Ohio, Connecticut, and Illinois, the IMFTF drafted a local rule, later approved by the Marion Superior Court in March 2009. The local rule required a settlement conference between borrower and lender in owner-occupied foreclosure cases.

Concurrently, the federal government required banks to offer loan modification programs to eligible borrowers. In July 2009, SB492, modeled in large part after the aforementioned Marion County local rule and sponsored by Senator Karen Tallian of Portage, Indiana, was enacted. (I.C. 32-30-10.5 et seq.). SB492 made settlement conferences available to all homeowners who requested them within certain timelines.

Since the passage of the local rule and SB492, much progress has been made. In Marion Civil Court IV, for example, 197 settlement conferences have occurred; of those, 27% resulted in dismissal of the foreclosure action and 15% are pending with proposed settlements.

In early 2010, the Indiana Supreme Court introduced pilot projects in Marion, Allen, Monroe, and St. Joseph counties which provide logistical coordinators and facilitators who manage the settlement conferences. In Marion County, three courts are part of the pilot program: Circuit Court and Civil Courts IV and X. This program has streamlined the foreclosure process, proving highly beneficial to successful outcomes. In-person facilitation has insured good faith settlement negotiation between borrower and lender.

In addition to these measures, other members of the IMFTF were educating and training volunteer attorneys to represent borrowers pro bono. To date, over 1000 attorneys statewide have received foreclosure training. Members involved with foreclosure prevention at the state level have also continued to work by keeping the crisis statistics current, providing access to twenty-four hour debt counseling services, and affording relief to homeowners through the “Get Hope Get Help Hotline,” (1-800-382-5516).

In sum, the Indianapolis Mortgage Foreclosure Task Force has met many of its goals and continues to move forward. Improvements are needed to encourage and expedite case resolution, such as the linking of homeowners directly to a legal-advice hotline. A better process for the exchange of information between debt counselors and case facilitators may reduce duplicative efforts. Additionally, the establishment of a confidential E-Repository for all settlement-related documents could eliminate cancelled meetings.

The Indianapolis Bar Association can be proud of the accomplishments of the Mortgage ForeclosureTask Force. Desperate times have called for a much needed change in mortgage foreclosure case management and local lawyers and judges have answered the call.•

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  1. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  2. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  3. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  4. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

  5. You can put your photos anywhere you like... When someone steals it they know it doesn't belong to them. And, a man getting a divorce is automatically not a nice guy...? That's ridiculous. Since when is need of money a conflict of interest? That would mean that no one should have a job unless they are already financially solvent without a job... A photographer is also under no obligation to use a watermark (again, people know when a photo doesn't belong to them) or provide contact information. Hey, he didn't make it easy for me to pay him so I'll just take it! Well heck, might as well walk out of the grocery store with a cart full of food because the lines are too long and you don't find that convenient. "Only in Indiana." Oh, now you're passing judgement on an entire state... What state do you live in? I need to characterize everyone in your state as ignorant and opinionated. And the final bit of ignorance; assuming a photo anyone would want is lucky and then how much does your camera have to cost to make it a good photo, in your obviously relevant opinion?

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