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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. What is the one thing the Hoosier legal status quo hates more than a whistleblower? A lawyer whistleblower taking on the system man to man. That must never be rewarded, must always, always, always be punished, lest the whole rotten tree be felled.

  2. I want to post this to keep this tread alive and hope more of David's former clients might come forward. In my case, this coward of a man represented me from June 2014 for a couple of months before I fired him. I knew something was wrong when he blatantly lied about what he had advised me in my contentious and unfortunate divorce trial. His impact on the proceedings cast a very long shadow and continues to impact me after a lengthy 19 month divorce. I would join a class action suit.

  3. The dispute in LB Indiana regarding lake front property rights is typical of most beach communities along our Great Lakes. Simply put, communication to non owners when visiting the lakefront would be beneficial. The Great Lakes are designated navigational waters (including shorelines). The high-water mark signifies the area one is able to navigate. This means you can walk, run, skip, etc. along the shores. You can't however loiter, camp, sunbath in front of someones property. Informational signs may be helpful to owners and visitors. Our Great Lakes are a treasure that should be enjoyed by all. PS We should all be concerned that the Long Beach, Indiana community is on septic systems.

  4. Dear Fan, let me help you correct the title to your post. "ACLU is [Left] most of the time" will render it accurate. Just google it if you doubt that I am, err, "right" about this: "By the mid-1930s, Roger Nash Baldwin had carved out a well-established reputation as America’s foremost civil libertarian. He was, at the same time, one of the nation’s leading figures in left-of-center circles. Founder and long time director of the American Civil Liberties Union, Baldwin was a firm Popular Fronter who believed that forces on the left side of the political spectrum should unite to ward off the threat posed by right-wing aggressors and to advance progressive causes. Baldwin’s expansive civil liberties perspective, coupled with his determined belief in the need for sweeping socioeconomic change, sometimes resulted in contradictory and controversial pronouncements. That made him something of a lightning rod for those who painted the ACLU with a red brush." http://www.harvardsquarelibrary.org/biographies/roger-baldwin-2/ "[George Soros underwrites the ACLU' which It supports open borders, has rushed to the defense of suspected terrorists and their abettors, and appointed former New Left terrorist Bernardine Dohrn to its Advisory Board." http://www.discoverthenetworks.org/viewSubCategory.asp?id=1237 "The creation of non-profit law firms ushered in an era of progressive public interest firms modeled after already established like the National Association for the Advancement of Colored People ("NAACP") and the American Civil Liberties Union ("ACLU") to advance progressive causes from the environmental protection to consumer advocacy." https://en.wikipedia.org/wiki/Cause_lawyering

  5. Mr. Foltz: Your comment that the ACLU is "one of the most wicked and evil organizations in existence today" clearly shows you have no real understanding of what the ACLU does for Americans. The fact that the state is paying out so much in legal fees to the ACLU is clear evidence the ACLU is doing something right, defending all of us from laws that are unconstitutional. The ACLU is the single largest advocacy group for the US Constitution. Every single citizen of the United States owes some level of debt to the ACLU for defending our rights.

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