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Indiana ""Attorney General Greg Zoeller"":http://www.in.gov/attorneygeneral/ on Monday filed a petition asking the Indiana Supreme Court to impose new procedures for foreclosures filed in the state.
[IMAGE]""When some mortgage lenders try to foreclose on distressed homeowners by filing foreclosure documents that are unverified, unauthenticated, or riddled with errors, it not only violates the rights of the homeowners but it is also a fraud upon the court,"" Zoeller said. ""In Indiana, we are not going to wait for federal government action; we will forge ahead to craft our own solution.""
Zoeller's appeal to the state's highest court to step in and ensure borrowers' legal rights are protected and foreclosure actions follow the letter of the law comes even as the ""50-state investigation"":http://dsnews.comarticles/all-states-to-take-part-in-coordinated-foreclosure-investigation-2010-10-13 continues into improper ""robo-signing"" practices within the industry.
Zoeller's proposal is based on a list of recommendations put forth by a state task force made up of judges, attorneys that represent mortgage lenders, consumer attorneys, and representatives from the Indiana attorney general's office.
It would require a mortgage lender seeking to foreclose to produce the original signed mortgage note when asked by
[COLUMN_BREAK]the court and the chain of title proving that the lender has the right to enforce the note.
Under the proposal, the court would be required to send a notice to the borrower of their legal right to a settlement conference with the lender, and a judge would not be allowed to make a foreclosure judgment until the settlement-conference report has been filed with the court. It would also prohibit the mortgage lender from asking the borrower to waive his or her legal right to a settlement conference.
Zoeller's proposal would also prohibit a court from ordering a home foreclosed if the borrower is being evaluated for a loan modification under the federal government's Home Affordable Modification Program (HAMP).
Zoeller also wants to allow courts to impose monetary sanctions on lenders who fail to comply with the best practices proposal, should it be implemented by the Supreme Court. His petition notes that judges in Allen and St. Joseph counties have ordered sanctions of between $150 to $2,500 for similar violations.
""By some estimates, a sizeable percentage of homeowners facing foreclosure are not represented by attorneys, so no one is looking out for the borrower's interests except the court. We must ensure the process is fair,"" Zoeller said.
""These proposed best practices would provide much-needed transparency to the foreclosure process, encourage appropriate investigation and disclosure by the servicer, and lead to better enforcement of existing federal rules,"" Zoeller added.
According to a statement from the attorney general's office, the Indiana Supreme Court is expected to review the proposal and decide ""at a later date"" whether to adopt it as the standard lenders and services must follow for all foreclosures processed in the state.
