Summertime Advocacy, With a Look at Foreclosures

Guest blog by Amber R. Van Til, IBA Executive Vice President

During the “downtime” summer months, a great deal of advocacy takes place in preparation for the upcoming legislative Session. There are regional meetings, action alerts, summer study committees, fundraisers and events such as Blue Jeans for BANKPAC Day. Also this summer, the IBA Government Relations Team is continuing to explore the topic of foreclosure. There are no easy answers to this difficult issue, and certainly much is at stake. For a homeowner, foreclosure is financially and emotionally devastating, often following a series of setbacks. For the community, foreclosure means neighborhood vulnerability and compromised market value. For the lending bank, foreclosure signals certain loss ‒ a last result pursued only after exhausting all other options.

In Indiana there is some encouraging news with respect to the foreclosure situation. The frequency of foreclosures has been steadily decreasing, after peaking following the financial crisis of 2008. Also bear in mind that, even at the worst of times, Indiana was spared the dramatic housing scenarios experienced elsewhere in the nation, due to relatively stable housing prices. Indeed most Hoosier foreclosures have been attributed to job loss, not market volatility. Yet while looking at trends from a distance, let us remain sensitive to the reality that for the families, communities and financial institutions directly affected, each and every foreclosure is one too many. Let us also remember that the length of the foreclosure process in Indiana is one of the longest in the country. RealtyTrac reports an average foreclosure process of 601 days for Indiana, ranking our foreclosure period as the eighth longest in the United States.

This unwieldly foreclosure process has resulted in an abandoned housing problem, to the risk of the community at large. To address foreclosure concerns, the Indiana Bankers Association has been meeting regularly with several interested parties – including the Indiana Credit Union League, the Indiana Mortgage Bankers Association, consumer groups, nonprofit service organizations and legislators ‒ to review the process and consider ways to streamline it. At one point during the 2015 Session, the banking community was hopeful that an Indiana settlement conference provision would remain in SB 415, the Vacant and Abandoned Housing bill. The provision had addressed the duplicative requirements in the Dodd-Frank Act and Indiana Code regarding settlement conferences. Unfortunately, however, the provision proved too complicated to examine at length during the rush of the Session and was removed before the bill passed. Though the IBA was supportive of removing the provision, as it had not been thoroughly vetted and understood, its removal is testament to the challenges of foreclosure reform.

Throughout this summer and in upcoming months, your GR Team will continue to meet with interested parties to seek a positive resolution to the foreclosure issue. While we are grateful that the rate of foreclosures in our state is decreasing, we are eager to see the process amended, for the benefit of all.

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