Debtor Counseling in Indiana House Repo Prevention Law
Thursday, May 14th, 2009Indiana legislators have introduced a house repo prevention law expected to abate the worsening problem of foreclosures in the state. The law limits unfair practices and requires counseling for distressed homeowners facing the danger of losing their houses to foreclosure.
Senator Dennis Kruse believed that there is a big possibility that the housing system can be reformed and improved. He pointed out that adjustments are being made in the housing market that may lead to preventing foreclosures from further ruining lives of many homeowners.
The foreclosure-prevention legislation Senate Bill 492, which was passed and approved by Indiana Governor Mitch Daniels, contains two provisions on notification process. These provisions are expected to address the worsening house repo problem in the state.
The first notification process provision requires lenders who are planning to file foreclosure proceedings to send a notification to the delinquent borrower, 30 days before the filing of foreclosure.
This provision encourages the troubled borrower to seek the advice of mortgage foreclosure counselors. The notification should also give instructions to delinquent borrowers on how to contact the Indian Foreclosure Prevention Network.
According to Tom Dinwiddie of the Indiana Mortgage Bankers Association, lenders are voluntarily sending notifications to borrower in advance of the filing of foreclosure. He suggested that the Indiana Housing and Community Development Authority developed a standard notification that is easy to understand and is not peppered with legal jargon.
The second provision applies to the required notification that lenders should issue in the event they file for a foreclosure lawsuit. The notification should inform the borrowers that they may schedule settlement conferences by advising the court within a 30-day period.
According to Senator Karen Tallian, Indiana’s increasing foreclosure rates has adversely affected values of properties in the state. She believed that there is a great risk that property values will decline further if the foreclosure problem remains unchecked.
Tallian pointed out that it is in the best interest of the public if Indiana encourages lenders and homeowners to develop foreclosure alternatives. She added that settlement conferences in other states have proven to be successful in helping distressed homeowners understand that lending institutions are willing to work and help them remain in their properties.
Meanwhile, Dinwiddie believed that settlement conferences will be successful if borrowers take initiatives to schedule a meeting with lenders to discuss ways to prevent house repo.
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