State- and nationwide foreclosure filings (2005 2009) Pilot
county foreclosure filings (2005 2009) Number of settlement
conferences requested after legislation took effect on July 1, 2009
Number of settlement conferences requested during first 3 weeks of
Allen Co. pilot project Number/results of settlement conferences
held to date Future of the Mortgage Foreclosure Trial Court
Assistance Program
Slide 3
Slide 4
*2009 foreclosure filings not yet official
Slide 5
Slide 6
2009 - 2010 ALLEN COUNTY MORTGAGE FORECLOSURE FILINGS
Slide 7
Allen, Marion, St. Joseph, Monroe Counties Post-Telephone
Conference and Post-Settlement Conference Orders Data Collection
Form Case Number Tracking Data Collection in Non-Pilot Counties
Number of settlement conferences requested Sample of 1,500 2,500
cases statewide (+/- 5 margin of error)
Slide 8
Example: Delaware County* 295 foreclosures filed between July 1
and December 31, 2009 Of these 295 foreclosure filings, only 21
borrowers (7%) requested a settlement conference. Of these 21
settlement conferences: 5 borrowers (24%) received stay-in-home
workouts; 6 borrowers (29%) received no workout (foreclosure); 1
borrower (5%) failed to appear; and 9 borrowers (43%) are still
negotiating with the lenders and/or have not yet had a settlement
conference. Fewer than 2% of foreclosed Delaware County borrowers
received a workout within the first 6 months of SEA 492. *Data
collected by Delaware Circuit Court Judge Marianne Vorhees.
The last Orders for Telephone Conference in Allen County were
issued on 2/2/10. As of this date, there were 97 Mortgage
Foreclosure filings in Allen Superior Court. Of these 97 filings,
30 borrowers requested a settlement conference. Allen County
Response Rate = 30.9% Delaware County Response Rate = 7.1%
Slide 11
MARCH 10MARCH 11TOTALS STAY-IN-HOME WORKOUT 224 (33%) OTHER
WORKOUT011 (8%) NO WORKOUT LENDER PROCEEDS WITH FORECLOSURE 011
(8%) CONTINUED TO JUNE 9, 2010325 (42%) LENDER NO-SHOW; SANCTIONS
ISSUED101 (8%)
Slide 12
St. Joseph County 1710 MF filings in 2009 Program began April
15 Marion County 8,607 MF filings in 2009 Program will begin late
April/early May Monroe County 340 MF filings in 2009 Program set to
begin mid-summer Assuming similar MF filing rates and conference
request rates in each of our pilot counties, this program could
help as many as 3,000 Allen, Marion, Monroe, and St. Joseph County
borrowers in 2010.
Slide 13
Please Contact: Elizabeth Daulton Project Manager, Mortgage
Foreclosure Trial Court Assistance Project Indiana Supreme Court,
Division of State Court Administration 30 South Meridian Street,
Suite 500 Indianapolis, Indiana 46204 Tel: (317) 234-7155 Fax:
(317) 233-6586 [email protected]
Slide 14
Mortgage Foreclosure: a Nationwide Financial Crisis Coming to a
Courtroom Near You Presented by: The Hon. Michael G. Gotsch
Slide 15
Tsunami Warning: Mortgage Foreclosure Crisis In Indiana 45,394
foreclosure actions filed in 2008; 45,394 foreclosure actions filed
in 2008; 52% increase in mortgage foreclosure cases from 2003 to
2008 52% increase in mortgage foreclosure cases from 2003 to
2008
Slide 16
Tsunami Warning: Mortgage Foreclosure Crisis In Indiana
Mortgage foreclosures now comprise 15% of all civil filings
Mortgage foreclosures now comprise 15% of all civil filings
Bankruptcy filings in Indiana increased 41% in a single year
Bankruptcy filings in Indiana increased 41% in a single year
Staying Afloat: Early Response to the Mortgage Foreclosure
Crisis Philadelphia County (Philadelphia, Pennsylvania)
Philadelphia County (Philadelphia, Pennsylvania) Residential
Mortgage Foreclosure Diversion Program
Slide 19
Staying Afloat: Early Response to the Mortgage Foreclosure
Crisis Cuyahoga County (Cleveland, Ohio) Cuyahoga County
(Cleveland, Ohio) Foreclosure Mediation Program Foreclosure
Mediation Program
Slide 20
Staying Afloat: Early Response to the Mortgage Foreclosure
Crisis Marion County (Indianapolis, Indiana) Marion County
(Indianapolis, Indiana) Mortgage Settlement Conferences homeowners
& lenders Mortgage Settlement Conferences homeowners &
lenders Hon. Cynthia Ayers, Marion Superior Court Hon. Cynthia
Ayers, Marion Superior Court
Slide 21
Catching the Wave: Indiana Responds to the Crisis Local Courts
React Case management techniques Case management techniques
Additional Notice Requirements Additional Notice Requirements
Alternative Dispute Resolution Alternative Dispute Resolution
Slide 22
Catching the Wave: Indiana Responds to the Crisis Indiana
Foreclosure Prevention Network Indiana Foreclosure Prevention
Network Get Help, Get Help, Get Hope Get Hope
Slide 23
Catching the Wave: Indiana Responds to the Crisis I.C.
32-30-10.5 et seq. I.C. 32-30-10.5 et seq. Regulates mortgage
foreclosure actions Regulates mortgage foreclosure actions Creditor
must provide notice of intent to initiate foreclosure Creditor must
provide notice of intent to initiate foreclosure Creditor must
provide notice of right to participate in a settlement conference
Creditor must provide notice of right to participate in a
settlement conference Foreclosure judgment guidelines Foreclosure
judgment guidelines
Slide 24
Catching the Wave: Indiana Responds to the Crisis I.C.
32-30-10.5-8 I.C. 32-30-10.5-8 Requires former owner of real
property that is the subject of a judgment of foreclosure to notify
each tenant of judgment and of tenants rights
Slide 25
Catching the Wave: Indiana Responds to the Crisis I.C.
24-5-23.5 et seq. I.C. 24-5-23.5 et seq. Regulates residential
mortgage lending practices; authorizes regulatory enforcement by
Indiana Attorney General Regulates residential mortgage lending
practices; authorizes regulatory enforcement by Indiana Attorney
General
Slide 26
Plugging the Dike: Other Initiatives Federal Assistance
Programs HAMP and HAFA (https://www.hmpadmin.com) Federal
Assistance Programs HAMP and HAFA (https://www.hmpadmin.com)
Slide 27
Plugging the Dike: Other Initiatives
Slide 28
Up the River: St. Joseph County Experience Temporary Order
Slide 29
Up the River: St. Joseph County Experience Clerk processes
case
Slide 30
Up the River: St. Joseph County Experience Courts Notice to
Homeowners
Slide 31
Up the River: St. Joseph County Experience Order of
Administrative Transfer
Slide 32
Up the River: St. Joseph County Experience Order for Telephonic
Conference
Slide 33
Up the River: St. Joseph County Experience Facilitators Report
to be filed with Court and then forwarded to original Judge to
include in file. Administrative Judge issues Post-Settlement
Conference Order and case is re-assigned to originating Judge
Slide 34
Slide 35
SETTLEMENT CONFERENCES: How They Work or Do They? Hon. Nancy
Eshcoff Boyer Allen Superior Court
Slide 36
Purposes of Foreclosure Prevention Legislation Foster
communication between lenders and homeowners Facilitate
modification of residential mortgages Avoid unnecessary
foreclosures
Slide 37
Reaching Homeowners Notices were sent separately in cases
pending on July 1, 2009 Notices included in Complaint by Lender
resulted in drop in requests Drop in requests was seen
statewide
Slide 38
How to Reach the Borrower? Borrowers were not seeing notice
and/or were not aware of the right to request a Settlement
Conference
Slide 39
Goals of Telephone Conferences Increase awareness of Settlement
Conferences Reduce expenses (travel, time) for Lenders and
Borrowers Get information exchanged earlier
Slide 40
Telephone Conferences Cases are assigned to a Facilitator Order
for Telephone Conference sent to Borrower separately from the
service of Complaint Order contains DATE and TIME for Borrower and
Attorney for Lender to call Facilitator
Slide 41
Telephone Conf. Benefits Explain to Borrower what a Settlement
Conference entails Explore whether Settlement Conference would be
beneficial for Borrower
Slide 42
Telephone Conf. Benefits Obtain contact information for
representative of Lender/Servicer Facilitator has ability to
establish other requirements based on individual circumstances
Slide 43
Issues with Past Settlement Conferences Conferences were only
information gathering sessions Expenses (travel, time) for parties
to attend in person Few final agreements reached
Slide 44
Perfect Settlement Conference Parties exchange information
after Phone Conference Lender has programs to offer Borrower at
Settlement Conference Facilitator files Data Collection Form
outlining workout reached Court issues order on results
Slide 45
Reality Sets In Borrower unable to follow-up with Lender
Documents still being exchanged/processed by Lender at time of
Settlement Conference Attorney for Lender seeking Foreclosure while
negotiations are continuing
Slide 46
Examples of Difficulties Settlement Conference concludes with
negotiations continuing yet Attorney for Lender proceeds with
pursuing foreclosure At Summary/Default Judgment hearing Borrower
states still working with Lender on modification
Slide 47
Examples of Difficulties No specifically named person at Lender
for Borrower to contact regarding file Lender, Servicer and
Attorney for Plaintiff have competing interests regarding
foreclosure No way for Borrower to follow-up and they are swallowed
up/lost in the system
Slide 48
QUESTIONS
Slide 49
Indiana Foreclosure Prevention Network Spring Judicial College
April 16, 2010 Presented by Stephanie Reeve Indiana Foreclosure
Prevention Network 1-877-GET HOPE www.877GETHOPE.ORG
Slide 50
Scope of the Foreclosure Issue WHAT DOES INDIANAS FORECLOSURE
PROBLEM LOOK LIKE? 11 TH in the nation on rate of home loans in
foreclosure (4.34% of all mortgage loans in foreclosure per
Mortgage Bankers Association) 7 th highest rate of delinquent
mortgage loans (11.73% of all mortgage loans past due per Mortgage
Bankers Association)
Slide 51
Scope of the Foreclosure Issue HOW IS THAT AFFECTING
COMMUNITIES? Reduction in property tax base Preventing a
foreclosure can provide a savings for the homeowner, financial
institutions, local government, and neighboring homeowners
Conservative estimates indicate that one foreclosure costs
stakeholders $50,000 Preventing even a fraction of the foreclosures
in Indiana will save stakeholders hundreds of millions of
dollars
Slide 52
Indiana Foreclosure Prevention Network WHAT IS THE INDIANA
FORECLOSURE PREVENTION NETWORK? A public-private coalition of
community service and housing-related organizations, government
agencies, lenders, realtors, and trade associations WHAT IS THE
MULTI-TIERED SOLUTION? 1-877-GET-HOPE helpline and
www.877gethope.org A network of trained foreclosure intervention
specialists serving every part of the state A marketing campaign
that utilizes grassroots strategies, media, and community
events
Slide 53
Indiana Foreclosure Prevention Network OVERVIEW OF THE IFPN
HELPLINE AND WEBSITE Since July 2009, the helpline receives an
average of 2,225 calls per month Of those calls, approximately
1,300 (60%) of those clients are referred to one of 25 Network
Agencies for foreclosure counseling services each month The
www.877gethope.org website also generates thousands of hits each
month. An average of 264 clients complete an online application.
All of these clients are referred to Network Agencies for
additional counselingwww.877gethope.org
Slide 54
Inside the Numbers REASON FOR DEFAULT 60%Reduction in or Loss
of Income 13%Medical Expenses 11%Poor Money Management or Excessive
Debt 5%Death or Divorce
Slide 55
Inside the Numbers WHERE ARE THE MAJORITY OF IFPN CLIENTS Using
data since July of 2009, the following areas have the highest
volume of clients: Marion County (16.76%) Lake County (8.97%) Allen
County (3.95%) St. Joseph County (3.59%) Hamilton County (3.38%)
Elkhart County (2.38%) Madison County (2.32%) Johnson County
(2.15%) Porter County (2.12%) Hendricks County (2.06%)
Slide 56
The Role of a Foreclosure Counselor Determine the financial
situation of the borrower and complete a budget Determine what
alternatives to foreclosure (a workout) may be available or best
suited for the homeowner Develop an action plan, which requires the
participation of the client Submit proposals to the lender Prepare
the client for a settlement conference Assist the client in finding
an attorney, if needed If necessary, helping to prepare the client
for a foreclosure and assisting with finding them rental
housing
Slide 57
IFPN Counselor Training Overview The state certifies IFPN
agencies and their employees for foreclosure counseling Currently,
there are 89 certified foreclosure counselors and 25 IFPN Network
Agencies that serve all 92 Indiana counties To become certified by
the State, it requires an initial 60 hours of training. Training
includes: Basic foreclosure and budget counseling Advanced
foreclosure and budget counseling Indiana-specific trainings
Additional trainings on specific programs (Settlement Conferences,
MHA, Fannie D4L, etc.)
Slide 58
A Counselors Role in a Settlement Conference To determine what
mortgage payment the client can afford To determine what workout(s)
the client may be eligible for. This includes determining whether
they will be able to stay in the home
Slide 59
What is a Workout? Short Sale Sale of Home or Refinance Deed in
Lieu of Foreclosure Assumption of Mortgage Partial Claim Agreement
Loan Modification or Repayment Plan Loan Reinstated.
Slide 60
What is a Workout? OPTIONS TO STAY IN THE HOME Refinance Paying
off one loan by obtaining another to secure better loan terms (like
a lower interest rate) Loan Modification: An option where lender
modifies loan to lower interest rate and/or extend the term of the
mortgage loan and thus reduce the monthly payments Repayment Plan:
An agreement where the borrower agrees to make additional payments
to pay down past due amounts while making regularly scheduled
payments
Slide 61
What is a Workout? OPTIONS TO STAY IN THE HOME (Cont). Partial
Claim Agreement: An option that allows a borrower, with help from a
lender, to get an interest-free loan from HUD to bring their
mortgage payments up to date Loan Reinstated: A phase of the
foreclosure process where the homeowner has an opportunity to stop
the foreclosure by paying money that is owed to the lender
Slide 62
What is a Workout? OPTIONS THAT MEAN GIVING UP HOME Sale of
Home Short Sale: A procedure in which the borrower is allowed to
sell a property for an amount less than what is owed on it to avoid
a foreclosure. This sale fully satisfies the borrower's debt Deed
in Lieu of Foreclosure: To avoid foreclosure, a deed is given to
the lender to fulfill the obligation to repay the debt; this
process does not allow the borrower to remain in the house but
helps avoid the costs, time, and effort associated with
foreclosure
Slide 63
What is a Workout? OPTIONS THAT MEAN GIVING UP HOME (Cont).
Assumption of Mortgage: When a home is sold, the seller may be able
to transfer the mortgage to the new buyer. This means the mortgage
is assumable. Lenders generally require a credit review of the new
borrower and may charge a fee for the assumption. Some mortgages
contain a due-on-sale clause, which means that the mortgage may not
be transferable to a new buyer. Instead, the lender may make you
pay the entire balance that is due when you sell the home
Slide 64
Making Home Affordable and Other Federal Programs MHA is an
umbrella for several federal mortgage foreclosure prevention
programs. They include: Home Affordable Modification Program Second
Lien Modification Program (2MP) Home Affordable Refinance Program
Home Affordable Foreclosure Alternatives Program Note: Recent
announced changes will do a couple of things: Allow for
modifications under HAMP for unemployed workers Require full
underwriting and documentation for HAMP, in order to eliminate the
use of temporary modifications that RARELY become permanent under
this program Incentives under HAFA for both the homeowner and the
lender, to encourage short-sales as an alternative to
foreclosure
Slide 65
Making Home Affordable and Other Federal Programs Fannie Mae
Deed-for-Lease If a homeowner with a Fannie Mae mortgage determines
that a deed-in-lieu to foreclosure is their best option, there is a
possibility that they can continue to live in their home as a
tenant for up to a year
Slide 66
DONT LET THE WALLS FORECLOSE IN ON YOU Questions? Thank
You!