Courts consider foreclosure issues

To address recent news regarding foreclosures – including a handful of national banks putting holds on foreclosure proceedings regarding their lenders – participants in the foreclosure prevention efforts of the Indiana Supreme Court, including judges in pilot programs around the state for settlement conferences, held a conference call Oct. 19 to address these issues.

During the call, the participants addressed two main issues, according to Elizabeth Daulton, project manager of the Mortgage Foreclosure Trial Court Assistance Project, which is overseen by the Indiana Supreme Court Division of State Court Administration.

The first concern is the “robo-signing,” where it was reported in the media in the last few weeks that some banks had someone who wasn’t the correct person sign off on foreclosure paperwork without giving it enough attention to make sure it was done properly.

“However, this is just the tip of the iceberg,” Daulton said via e-mail Oct. 21. “A second problem is the fact that many plaintiff lenders have filed suit and proceeded to judgment without sufficient documentation establishing that they are a holder in due course of the underlying debt. Judy Fox, who serves as a facilitator in St. Joseph County (and also leads a legal clinic at Notre Dame Law School) says that her clinic doesn’t handle that many foreclosure cases, but a staggering number of them involve insufficient documentation – so she believes the problem is widespread.”

She added that lenders that had “robo-signed” paperwork have been “re-certifying” pending foreclosure cases, “but this only involves checking the accuracy of the amounts owed (and checking the computer system for errors). Recertifying does not involve investigation of the note’s ownership or tracking back the various assignments, many of which are undated,” she said.

While no definite cause of action was decided during the call, a number of ideas have been shared, and there will be a follow-up call Oct. 28, the same day Indiana Continuing Legal Education Forum will host a daylong CLE about mortgage foreclosures as a follow-up to CLE seminars that took place over the summer of 2009.

Daulton said new guidelines would be decided on in the coming weeks that “should apply to all pending cases, as well as post-judgment, pre-sheriff’s sale cases. After the sheriff’s sale has taken place, there may not be much recourse for the borrower (though this is something else we’re looking into),” she said.
 

Rehearing "New approach to foreclosure prevention successful" IL Sept. 15-28, 2010