Lenders must notify homeowners of their right to request a settlement conference within 30 days of filing a foreclosure notice under a new Indiana law that state officials promoted Wednesday.
The conferences give homeowners a chance to renegotiate terms, such as their interest rates or payments, and keep their homes.
State officials also said about 700 attorneys and mediators in Indiana have been trained in foreclosures over the past several months, and many are expected to defend low-income homeowners for free.
Indiana Attorney General Greg Zoeller said those and other efforts involved all three branches of state government and should result in more residents keeping their homes.
More than 5,500 Indiana homes were in some stage of foreclosure in June, according to RealtyTrac Inc., a California-based foreclosure listing service. Indiana had the 13th highest foreclosure rate among the states for the first six months of 2009, with just under 1 percent of mortgages in foreclosure. Nevada was first, with more than 6 percent in foreclosure.
“That’s not part of the leadership I wish we were in, but it does require extraordinary efforts,” Zoeller said.
Indiana Supreme Court Justice Randall Shepard said in a January speech that his goal was to have 700 additional judges, lawyers and mediators trained in foreclosure law by this summer, giving homeowners more people to turn to. Officials said at least 600 lawyers had been trained as of this month, and about 100 lawyers for state and local governments were receiving the training.
Residents who are facing foreclosure can contact the Indiana Foreclosure Prevention Network for free counseling about their options. A toll-free hot line, 1-877-GET-HOPE, is available for initial advice, including how to seek an attorney who might be willing to take their case on for free.
“We are depending on attorneys to take some of these cases on a pro bono basis,” Shepard said.
Under a new state law that took effect on July 1, lenders must inform borrowers within 30 days of filing a foreclosure notice that they can request a conference to discuss the matter.
State Rep. Jeb Bardon (D-Indianapolis) said the lender can still file a foreclosure notice before such a conference. But if a borrower requests one, court actions cannot continue before a conference is held.
Bardon said a similar law in Ohio has resulted in fewer foreclosures.
“This is a good thing because it’s facilitating homeowners being able to sit down and talk through their situation with a lender before a final foreclosure judgment occurs,” he said. “It allows all their options to avoid foreclosure if at all possible.”