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Tuesday, March 10, 2015

Ind. Gov't. - Provisions erroneously repealing 2009 settlement conference law corrected a month ago on Senate floor [Updated again, on 3/11/15]

Sunday's Fort Wayne Journal Gazette reported that SB 415 has "a paragraph repealing language from state code that created, back in 2009, the practice of mortgage settlement conferences for troubled borrowers facing foreclosure."

In a post that same day the ILB wrote: that was true about the bill as it came out of Senate committee, but a successful 2nd reading amendment had deleted the repeals.

Being unfamiliar with banking law, the ILB did wonder whether Tallian's:

... change that would leave the current Indiana law in effect except that it "does not apply to a mortgage that is serviced by a mortgage servicer that is subject to the requirements of 12 CFR 1024.39, 12 CFR 1024.40, and 12 CFR 1024.41" would add clarity, or sow confusion?
Today, as related in this ILB post, Attorney General Zoeller issued a news release warning:
... that an important consumer protection helping distressed homeowners avoid foreclosure – the settlement conference – is in danger of being eliminated because of a proposal moving through the Legislature that to this point received insufficient discussion or debate in committee or floor sessions. Zoeller urged state legislators to remove the proposal before it goes any further in the process so that the foreclosure-preventing settlement conference process that helps homeowners stay in their homes can continue unimpeded.
The ILB commented in the post that: "It is not clear whether the AG's statement takes into account the 2nd reading amendment made by Sen. Tallian" over a month ago, on Feb. 10th.

To clarify this matter, this evening the ILB watched and transcribed Senator Tallian's presentation of her successful Feb. 10th 2nd reading amendment - Am. #3. Here is the complete transcript, it can be found in the Senate Video Archives for Feb. 10, 2015, beginning at about 33:22:00:

Senator Tallian: Am. #3 reinstates something that had been taken out that was probably an error. We set up a settlement conference mechanism here in 2009 and now some of the banks of a certain size must do their settlement conferences before they file the complaint for foreclosure, according to the federal Dodd-Frank Act.

We are going to let them do that settlement conference before foreclosure but require the other banks to keep the settlement conference.

So the mortgage settlement foreclosure conference is not gone. I ask for your support.

At about 34:32:00, Senator Merritt, the bill's auther: There is a need for settlement conferences and I appreciate Senator Tallian's submitting the amendment, which I support.

The amendment was adopted and is reflected in the current, Feb. 17, 2015 printing of SB 415.

[Updated at 8:51 PM] The ILB has learned that SB 415 is not yet completely fixed. As noted, Sen. Tallian's 2nd reading amendment restores settlement conferences for loans outside the jurisdiction of Dodd-Frank, but "she is working with IACED (Indiana Association for Community Economic Development), the AG and others to further correct the situation."

[Updated at 9:48 AM on 3/11/15] Okay, here is the current situation.

Posted by Marcia Oddi on March 10, 2015 06:57 PM
Posted to Indiana Government