The Courier-Journal - Thompson Offers Foreclosure Mediation
Daniels' campaign cites action on issue
Mike Smith
Democratic gubernatorial candidate Jill Long Thompson proposed measures yesterday designed to help families avoid home foreclosures, including required mediations between borrowers and lenders.
She accused Republican Gov. Mitch Daniels of doing nothing to help people avert foreclosures. But he has signed legislation over the past two years that at least partially addresses the issue.
Thompson said the mortgage crisis is one of the leading factors behind the nation's economic woes, and Indiana continues to be one of the top states in the percentage of homes in foreclosure. It ranks sixth in the nation, according to the latest figures from the Mortgage Bankers Association.
"I think we're in for some very tough times, and we need to be doing everything we can at the state level," Thompson said. "The federal government needs to take action, but we here in Indiana need to have policies that are going to work for our families."
Under her proposal, property owners scheduled for foreclosure would be required to attend a court-ordered meeting with the lender and a mediator in hopes of modifying the mortgage and keeping residents in their homes. The mediators might be brokers who agree to work for free in trying to negotiate terms in the interests of both the homeowner and the lender.
Thompson said Philadelphia has such a program that has helped avert foreclosures there.
Daniels campaign spokesman Cam Savage said the governor has worked to try to reduce foreclosures.
Daniels signed a bill earlier this year that puts mortgage-only loan businesses that offer first-lien mortgages under the regulation of the state Department of Financial Institutions. Banks and second-mortgage lenders already fall under the agency's oversight.
The new law also mandated a database to keep electronic records of all professionals involved in a real estate action.
Last year, Daniels signed a bill that created the Indiana Foreclosure Prevention Network, which includes more than 40 banks, community organizations and housing agencies.
Thompson also said she would push legislation to extend the period from 90 days to 120 days between the filing of a foreclosure complaint and the lender's request for a court-ordered sale. That would give the borrower more time to refinance through another lender or renegotiate the existing mortgage.
She also said she would seek tougher laws against fraudulent or unscrupulous lending practices.
Thompson said some borrowers face foreclosure through no fault of their own, such as when a family's breadwinner gets sick and cannot work.
Earlier this year, Ivy Tech Community College teamed with the state foreclosure prevention network to offer workshops for struggling homeowners. It gave them a chance to meet face to face with housing counselors or their lenders. The topics included dealing with mortgage fraud, debt management and home improvement.
The foreclosure prevention network is an education and outreach organization of advisers for homeowners who need assistance. They can call a help line at (877) GET-HOPE or visit the Web site at www.877Gethope.org.
For the second quarter, which ended June 30, nationally 2.75 percent of homes were in foreclosure, according to the Mortgage Bankers Association.
Florida ranked No. 1 with 6 percent of its homes in foreclosure.
Indiana's rate was No. 6 at 3.59 percent.