April 11, 2011 – (RealEstateRama) — A new program that allows housing lenders and borrowers to easily exchange information is aimed at helping both sides work out a settlement agreement in foreclosure cases. The program centers on the launch of a secure online network that enables parties to more efficiently exchange documents during mediation. Chief Justice Randall T. Shepard explained the importance of the network. “The success of settlement conferences can depend on whether all the necessary paperwork is in place. We are giving both sides another tool to collect and review all the information needed to work out an agreement.”
Indiana trial courts, housing counselors with the Indiana Foreclosure Prevention Network (IFPN) and lender attorneys will have access to the secure network. It is not a court e-filing system. Instead, it is a secure online portal that will allow both sides to exchange financial documents. Information traded on the network may include account numbers, bank statements and tax returns. These documents are not normally filed with the court, but are critical to work out a settlement agreement and the failure to have them on hand can delay a settlement. The system also automatically tracks the status of every file – from submission to resolution – so that a record of every foreclosure can be viewed by the stakeholders.
The portal will first be used on a pilot basis in St. Joseph and Marion Counties. The Indianapolis law firm Feiwell & Hannoy P.C. will also use the portal during the pilot phase. The goal is to eventually allow the network to be used by lenders, borrowers and law firms across the state. The lender pays a $25 filing fee for use of the portal, which pays for the system. The portal was created by Default Mitigation Management, LLC (DMM).
In 2009, the state enacted a law giving borrowers the right to a settlement conference with their lenders. However, according to the Indiana Housing and Community Development Authority (IHCDA), most of the 300 conferences that occurred between July and December 2009 were unsuccessful because the parties were unprepared. Homeowners sometimes failed to bring the necessary documents or lenders sent entry-level employees who did not have authority to agree to mortgage changes. A clear need existed for more organization with settlement conferences.
Chief Justice Shepard has long pledged court support to help solve the mortgage meltdown. The Indiana Supreme Court’s State Court Administration (STAD) partnered with the IHCDA in early 2010 to create a system for coordinating settlement conferences. The system includes area project managers who oversee facilitators who coordinate with pro bono attorneys, homeowners, and lenders. There is a higher success rate with coordinated settlement conferences. More than 1300 conferences were requested in 13 pilot counties over the past 12 months. Of those 1300, more than 530 resulted in some sort of work out.
The aim of the new portal is to build on the success of the coordinated settlement conferences and facilitate the exchange of necessary documents. By providing a direct communication channel between all of the stakeholders, the hope is that mediation sessions will become more productive and lead to more resolutions in less time.