The Indiana Lawyer: Bankruptcy Flood Coming?

This article in The Indiana Lawyer predicts a "flood" of COVID-related bankruptcy filings and quotes a number of local BK lawyers.  That flood, which many predicted in March and April would have occurred by now, has not happened - yet.  But, conventional wisdom suggests it's not a matter of if, but when.  I tend to agree.

The same goes for COVID-related foreclosure filings, both residential and commercial.  Of course the consumer foreclosure moratorium prevented and, in many cases, continues to prevent a tidal wave of residential cases.  The interesting thing is that, at least from what I've seen, commercial foreclosures in Indiana have not spiked at all. 

My understanding is that, if a commercial flood, is coming, it will start with hotels - unless Congress provides some kind of bail out.  Having said that, with the stimulus money, combined with the general attitude of forbearing instead of foreclosing, it's difficult to predict when, or even if, a commercial foreclosure tsunami is near.        


Indiana Sheriff's Sale Update

The COVID-related impact upon Indiana sheriff's sales has had a few layers:

    1.    The first involved Governor Holcomb's moratorium on residential foreclosure activity. Click here for more on that subject. That ended July 31, 2020, and some sheriff’s sales occurred in August. For example, after cancelling its monthly sales from March through July, the Marion County (Indianapolis) civil sheriff held a sale on August 21st. Click here for more information on Marion County sales.

    2.    The second layer surrounded the federal mandate. Despite the expiration of the state suspension, there still is a moratorium on sales of (and, in fact, foreclosure actions involving) FHA-insured mortgages. This freeze extends to year-end. Click here for a press release and here for my 4/6/20 post about the CARES Act.

    3.    The third is that neither the federal nor the state orders impacted commercial (business) foreclosures or sales. Nevertheless, it does not appear that any commercial foreclosure sales occurred this Spring or early Summer. I could be wrong, but as a practical matter, my understanding is that sheriff’s sales simply stopped, even for commercial real estate.

    4.    The fourth and more subtle layer of COVID's impact upon Indiana sheriff’s sales relates, not to economic relief, but to safety and social distancing. (This might explain why no commercial sales happened.) As I’ve written here previously: local rules, customs, and practices control county sheriff’s sales. Thus, there is a certain degree of latitude that each county has, or is taking, with respect to whether to proceed with sales during the pandemic. A quick survey of the websites of SRI and Lieberman, two private companies that hold sheriff’s sales for select counties, shows that several sheriff’s offices in Indiana still are not having sales, despite the termination of the state and federal moratoria. My understanding is that these continued delays are based upon public health reasons and/or a county sheriff's interpretation of local social distincing guidelines.  

The upshot is to contact the county sheriff’s office, either by phone or via the internet, to determine exactly what’s going on with your particular case as the COVID situation continues to unfold.

__________

I represent parties in connection with foreclosure cases and sheriff’s sales. If you need assistance with a similar matter, please call me at 317-639-6151 or email me at john.waller@woodenlawyers.com. Also, don’t forget that you can follow me on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted on my home page.


Indiana's Recording Law Change, Effective July 1

I'm passing along information distributed by the Indiana State Bar Association.  For today's content, all the credit goes to the ISBA:   

On July 1, 2020, an obscure change to an Indiana recording statute becomes effective, requiring lawyers to change how they prepare deeds, mortgages, powers of attorney, affidavits, and other instruments that must be recorded in an Indiana County recorder’s office.

The ISBA has drafted a directive to provide significant guidance to all members about this change and the sufficiency of signatures and notarial certificates for recording any deed, mortgage, or other paper or electronic instrument after June 30, 2020.

Click here for the ISBA's directive.  


Governor Holcomb's June 30 Order Extending Residential Foreclosure Moritoriaum

Section 1 of the Governor's order addresses residential mortgage foreclosures and follows-up his order order from March 19th, which was the subject of my March 28th post.  Here are the highlights:

  1. Residential mortgage foreclosure actions based upon nonpayment cannot be filed until August 1.
  2. This does not change the federal order that prevents FHA-insured mortgages from being foreclosed through August 31.
  3. Foreclosure actions on vacant or abandoned property can proceed.

Marion County (Indianapolis) Sheriff's Sales Will NOT Start Back Up In July

Following-up last week's post (below), we learned this morning that the sheriff's office has postponed the July sale "due to the extended evictions and foreclosures issued by Gov Eric Holcomb through August 1st."  No sale in July.

_______________

Following the COVID-19 cancellations of the March, April, May, and June sales, the Marion County Civil Sheriff's Office is back in business.  The first sale since February will occur on July 15th.  Here is an email distributed by the Real Estate team this morning:

NEW RULES, REGULATIONS AND LOCATION FOR THE JULY SALE.

NEW LOCATION FOR THE JULY SALE - 8115 E. Washington St, Indianapolis IN 46219. Great parking.

SEVERAL WAYS TO LEAVE YOUR DEPOSIT:
You may come between 8:00 a.m. and 10:00 a.m. the morning of the sale, July 15th at 8115 E. Washington St and leave your deposit. However, we will end this process at 10:00 a.m. So if you are in line and the time hits 10:00 a.m. you will not be able to leave your deposit. So our suggestion is that you still come to the City-County Building at 200 E. Washington St 11th Floor conference room the day before the sale between 8:00 a.m. and Noon. Only one person allowed in the conference room at a time. Please social distance in the hallway of 6 feet.

For those of you that are in the pilot program you may still continue to send your registration form and check via email. Teena will stay one hour after the sale at 8115 E Washington St for you to bring your check back or you may also take it downtown to the City County Building right after the sale and Lori will be there to also take your check. Your choice.

It is mandatory that you stay and pick up your check if you did NOT win a bid. We will instruct you on this process the day of the sale.

SOCIAL DISTANCING:

A mask is required at the new location and in the City County Building.
Only bidders that have a paddle will be allowed in the bidding room. Other guest and attorney’s not bidding must go into the conference room. You will be able to hear the bidding process in that room. The conference room is not very large and may be difficult to social distance as per the recommendations of CDC. Please take this into consideration when choosing on whether or not you would like to attend since only 1 bidder is allowed in the bidding room per company/investor.

We will update the website soon as well with these changes. Please feel to contact us with any questions.

RE Team


Please visit our website: https://www.indy.gov/activity/sheriff-real-estate-sales

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I represent parties in connection with foreclosure cases and sheriff’s sales. If you need assistance with a similar matter, please call me at 317-639-6151 or email me at john.waller@woodenlawyers.com. Also, don’t forget that you can follow me on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted on my home page.


Indiana Supreme Court's 5/29/20 Order Extending Its 3/16/20 Order Related to COVID Relief And Procedures

On May 29, 2020, the Supreme Court entered the following order:  Order Extending Trial Courts' Emergency Tolling Authority and Setting Expiration of Other Emergency Orders.  The latest order follows-up the original order entered March 16, 2020, which I discussed in the following post from that date:  Indiana State Bar Association: COVID-19 Updates for the Legal Community

Be sure to check your relevant county courts for any local measures adopted.  For example, here in Marion County (Indianapolis), the Indiana State Bar Association released the following on May 18th:

We wanted to share the below update from the Marion Superior and Circuit Courts.

The Indiana Supreme Court has required that all Indiana trial courts seek advice and guidance from stakeholders. Based on this advice and guidance, you can expect that the earliest date the Marion Superior and Circuit Courts may return to any in-person hearings would be June 15. This is based on guidance and orders from the Indiana Supreme Court, collaboration with the controller and other city officials, as well as expert medical advice. 

Due to the high number of COVID-19 positive cases and deaths in Marion County, the courts are currently at least two weeks behind Governor Holcomb's Roadmap to Safely Reopen Indiana. The City-County Building is a particularly tough building to comply with the CDC and state/local health department requirements and recommendations. On an average day, 5,000 individuals enter the building, including employees. The city is in the process of engaging a firm with expertise in assisting all branches of government and city/county agencies in operating safely in a COVID-19 environment. This requires modification of the building in many areas. Some examples are installation of plexiglass, how elevators will be used by staff and the public, use of PPE by employees and the public, and what screening measure(s) will be used to enter the building, just to name a few.

With questions about a case, visit mycase.in.gov.

If you need the assistance of court staff, click here to visit the Marion Superior Court’s website for a listing of essential staff, or click here to visit the Marion County Circuit Court website. This is the best way to obtain information about a particular court and/or that court’s practices and policies during this time. While there is a general voicemail for the court system, court-specific phone communication is not possible at this time.


Status Of Marion County Indiana Sheriff's Sales

The Marion County Civil Sheriff's Office issued the following email last week:

The Marion County Sheriff sale for June 17th has been cancelled. These sales will be moved to August. However, your sales that moved from April to the June sale will have to be praeciped again. Please continue to send in your April cost checks.

I should be getting the July sale decrees from the Clerk this Friday. I will reassign your May SFN to the July sale. If you have not let us know the sales you want moved from May to July please let me know no later than Friday, the 15th by Noon.

We continue to work from home for the unforeseeable future. Please stay safe.

RE Team


Status Of Indiana Sheriff's Sales

For what it's worth, the Marion County (Indianapolis) Civil Sheriff's Office announced last week that its May 2020 sale has been cancelled.  (The sheriff previously cancelled the April sale.)  The email from Marion County indicated that the June 2020 sale is still a go - at least for now.  The Marion County situation seems to be consistent with both our Governor's order and the CARES Act, Sections 4022 and 4023, to the extent those apply to a particular case.  

Always remain mindful that, although the Indiana Code covers the fundamentals of the sheriff's sale process, the specific procedures vary by county.  Local rules, customs, and practices control.  There is a saying in Indiana that there are 92 counties and therefore 92 different sets of rules applicable to sheriff's sales.  My point is that, if you have questions, you should call the local civil sheriff's office to confirm the status of its foreclosure sale activities (publications, notices, sales, etc.)  during the COVID-19 pandemic.  


The Federal CARES Act - Multifamily Properties With Federally Backed Loans

Here is a verbatim quote of Section 4023:

FORBEARANCE OF RESIDENTIAL MORTGAGE LOAN PAYMENTS FOR MULTIFAMILY PROPERTIES WITH FEDERALLY BACKED LOANS

(a) IN GENERAL.—During the covered period, a multifamily borrower with a Federally backed multifamily mortgage loan experiencing a financial hardship due, directly or indirectly, to the COVID–19 emergency may request a forbearance under the terms set forth in this section.

(b) REQUEST FOR RELIEF.—A multifamily borrower with a Federally backed multifamily mortgage loan that  was current on its payments as of February 1, 2020, may submit an oral or written request for forbearance under subsection (a) to the borrower’s servicer affirming that the multifamily borrower is experiencing a financial hardship during the COVID–19 emergency.

(c) FORBEARANCE PERIOD.—

    (1) IN GENERAL.—Upon receipt of an oral or written request for forbearance from a multifamily borrower, a servicer shall—

        (A) document the financial hardship;

        (B) provide the forbearance for up to 30 days; and

        (C) extend the forbearance for up to 2 additional 30 day periods upon the request of the borrower provided that, the borrower’s request for an extension is made during the covered period, and, at least 15 days prior to the end of the forbearance period described under subparagraph (B).

    (2) RIGHT TO DISCONTINUE.—A multifamily borrower shall have the option to discontinue the forbearance at any time.

(d) RENTER PROTECTIONS DURING FORBEARANCE PERIOD.—A multifamily borrower that receives a forbearance under this section may not, for the duration of the forbearance—

    (1) evict or initiate the eviction of a tenant from a dwelling unit located in or on the applicable property solely for nonpayment of rent or other fees or charges; or

    (2) charge any late fees, penalties, or other charges to a tenant described in paragraph (1) for late payment of rent.

(e) NOTICE.—A multifamily borrower that receives a forbearance under this section—

    (1) may not require a tenant to vacate a dwelling unit located in or on the applicable property before the date that is 30 days after the date on which the borrower provides the tenant with a notice to vacate; and

    (2) may not issue a notice to vacate under paragraph (1) until after the expiration of the forbearance.

(f) DEFINITIONS.—In this section:

    (1) APPLICABLE PROPERTY.—The term “applicable property”, with respect to a Federally backed multifamily mortgage loan, means the residential multifamily property against which the mortgage loan is secured by a lien.

    (2) FEDERALLY BACKED MULTIFAMILY MORTGAGE LOAN.—The term “Federally backed multifamily mortgage loan” includes any loan (other than temporary financing such as a construction loan) that—

        (A) is secured by a first or subordinate lien on residential multifamily real property designed principally for the occupancy of 5 or more families, including any such secured loan, the proceeds of which are used to prepay or pay off an existing loan secured by the same property; and

        (B) is made in whole or in part, or insured, guaranteed, supplemented, or assisted in any way, by any officer or agency of the Federal Government or under or in connection with a housing or urban development program administered by the Secretary of Housing and Urban Development or a housing or related program administered by any other such officer or agency, or is purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.

    (3) MULTIFAMILY BORROWER.—the term “multifamily borrower” means a borrower of a residential mortgage loan that is secured by a lien against a property comprising 5 or more dwelling units.

    (4) COVID–19 EMERGENCY.—The term “COVID–19 emergency” means the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act (50 U.S.C. 1601 et seq.).

    (5) COVERED PERIOD.—The term “covered period” means the period beginning on the date of enactment of this Act and ending on the sooner of—

        (A) the termination date of the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act (50 U.S.C. 1601 et seq.); or

        (B) December 31, 2020.

A Few Thoughts:

  1. Section 4023 applies to a limited set of commercial mortgage loans that are "federally backed" and that essentially are related to apartments.  
  2. Borrowers might be entitled to an automatic 30-day "forbearance" and two more automatic 30-day "forbearance" periods upon a written request, which documents a financial hardship.
  3. The borrower must have been current as of 2/1/20.
  4. The law does not apply to construction loans.
  5. "Forbearance" is not defined.

The Federal CARES Act - Consumer/Residential Mortgage Loans

Here is a verbatim quote of Section 4022:

FORECLOSURE MORATORIUM AND CONSUMER RIGHT TO REQUEST FORBEARANCE

(a) DEFINITIONS.—In this section:

    (1) COVID–19 EMERGENCY.—The term “COVID–19 emergency” means the national emergency concerning the novel coronavirus disease (COVID–19) outbreak declared by the President on March 13, 2020 under the National Emergencies Act (50 U.S.C. 1601 et seq.).

    (2) FEDERALLY BACKED MORTGAGE LOAN.—The term “Federally backed mortgage loan” includes any loan which is secured by a first or subordinate lien on residential real property (including individual units of condominiums and cooperatives) designed principally for the occupancy of from 1- to 4- families that is—(A) insured by the Federal Housing Administration under title II of the National Housing Act (12 U.S.C. 1707 et seq.);

        (B) insured under section 255 of the National Housing Act (12 U.S.C. 1715z–20);

        (C) guaranteed under section 184 or 184A of the Housing and Community Development Act of 1992 (12 U.S.C. 1715z–13a, 1715z–13b);

        (D) guaranteed or insured by the Department of Veterans Affairs;

        (E) guaranteed or insured by the Department of Agriculture;

        (F) made by the Department of Agriculture;    or

        (G) purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.

(b) FORBEARANCE.—

    (1) IN GENERAL.—During the covered period, a borrower with a Federally backed mortgage loan experiencing a financial hardship due, directly or indirectly, to the COVID–19 emergency may request forbearance on the Federally backed mortgage loan, regardless of delinquency status, by—

        (A) submitting a request to the borrower’s servicer; and

        (B) affirming that the borrower is experiencing a financial hardship during the COVID–19 emergency.

    (2) DURATION OF FORBEARANCE.—Upon a request by a borrower for forbearance under paragraph (1), such forbearance shall be granted for up to 180 days, and shall be extended for an additional period of up to 180 days at the request of the borrower, provided that, at the borrower’s request, either the initial or extended period of forbearance may be shortened.

    (3) ACCRUAL OF INTEREST OR FEES.—During a period of forbearance described in this subsection, no fees, penalties, or interest beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the mortgage contract, shall accrue on the borrower’s account.

(c) REQUIREMENTS FOR SERVICERS.—

    (1) IN GENERAL.—Upon receiving a request for forbearance from a borrower under subsection (b), the servicer shall with no additional documentation required other than the borrower’s attestation to a financial hardship caused by the COVID–19 emergency and with no fees, penalties, or interest (beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the mortgage contract) charged to the borrower in connection with the forbearance, provide the forbearance for up to 180 days, which may be extended for an additional period of up to 180 days at the request of the borrower, provided that, the borrower’s request for an extension is made during the covered period, and, at the borrower’s request, either the initial or extended period of forbearance may be shortened.

    (2) FORECLOSURE MORATORIUM.—Except with respect to a vacant or abandoned property, a servicer of a Federally backed mortgage loan may not initiate any judicial or non-judicial foreclosure process, move for a foreclosure judgment or order of sale, or execute a foreclosure-related eviction or foreclosure sale for not less than the 60-day period beginning on March 18, 2020.

Limited Applicability:

Neither the forbearance mandate nor the foreclosure moratorium of Section 4022 apply to commercial mortgage loans, nor do they apply to residential/consumer mortgage loans that are not "federally backed" per Section (a)(2).  See also the moratorium exception at Section (c)(2) for vacant or abandoned property.   


Governor Holcomb's Executive Order 20-06: How Does It Affect Indiana Foreclosures?

On March 19, 2020, Indiana's Governor handed down his Order for Temporary Prohibition on Evictions and Foreclosures.  With regard to mortgage foreclosures, here's what it says in pertinent part (italics added):

WHEREAS, the adverse economic impacts of COVID-19 … on Hoosiers … include … hindering their ability to pay … mortgages, which could potentially result in creditors … initiating foreclosure … proceedings to remove them from their homes;

WHEREAS, to avoid the serious health, welfare, and safety consequences that may result if Hoosiers are … removed from their homes during this emergency, it is reasonable and necessary to suspend laws relating to real property (including breach of … mortgages, etc.), to control the occupancy of premises in … Indiana, and to impose a moratorium on … foreclosures;

WHEREAS, … HUD, in an effort to provide immediate relief to … homeowners … will temporarily suspend all foreclosures …;

NOW, THEREFORE … [the Governor orders] that:

  1. No … foreclosure actions or proceedings involving residential real estate real estate … may be initiated … until the state of emergency has been terminated….
  2. No provision contained in this … Order shall be construed as relieving any individual of their obligations … to make mortgage payments, or to comply with any other obligation(s) that an individual may have under a … mortgage.

Takeaways

  1. Order 20-06 applies only to consumer/residential mortgage foreclosures - not commercial foreclosures.
  2. Lenders cannot file a mortgage foreclosure complaint (start a lawsuit) against a homeowner until the Governor terminates this order.
  3. Despite the Order, Borrowers must continue to make mortgage loan payments. 

Gray Area

    A question I have relates to the Order's use of the term "proceedings."  For example, paraphrasing Paragraph 1:  "no foreclosure proceedings may be initiated."  This part of the Order is subject to interpretation, and the courts ultimately will decide what it means.  It seems to me that the Order effectively suspends all residential foreclosure (sheriff's) sales.  On the other hand, in a pending residential foreclosure case, the Order arguably does not prohibit a party from filing a motion.  But, the Order may prevent the court from holding a hearing on the motion or from ruling on the motion.  To that end, in connection with a pending case it would be wise to investigate whether any county-specific orders exist or to simply call the court's office to determine how the judge has decided to apply the Order.          

    


Boone County Courts COVID-19 Order

If and to the extent you have any cases pending in Boone County, Indiana (my home county), please see the following order entered by the Indiana Supreme Court:  Boone County Order.

As to Marion County (where I work), my understanding is the Court's Executive Committee will be providing an update later this afternoon.  As of 3/13/20, click here for Marion County's press release.  


Indiana State Bar Association: COVID-19 Updates for the Legal Community

To: Indiana State Bar Association Members

From:  Indiana State Bar Assocaition

Date:  3/16/20

__________

In response to the COVID-19 outbreak, the Supreme Court has ordered trial courts to implement relevant portions of Continuity of Operations Planning (such as postponing jury trials, allowing for remote hearings, and keeping only essential staff in courthouses).

Trial courts are being directed to petition the Supreme Court through Administrative Rule 17 to carry out operational changes. AR 17 provides the framework for trial courts to put operational changes in place in the face of an emergency. Indiana Chief Justice Loretta Rush has already signed orders allowing for adjustments to jury trials, hearings, and other business practices as requested by counties. The Supreme Court is prioritizing review of any AR 17 petitions filed.

At the Supreme Court, attendance at oral arguments will be limited to the attorneys and parties in the case; the public is encouraged to watch the live webcasts.

The Office of Judicial Administration has already put in place social distancing and telework options for its employees.

In a press release just issued, Chief Justice Rush reported that she is monitoring the situation with guidance from the Indiana State Department of Health. She explained, “The Indiana Supreme Court will continue to hold oral arguments (subject to change), review cases, and accept filings—while taking proper measures to reduce exposure of COVID-19. We also know our trial court judges across the state are focused on ensuring essential court functions continue while being mindful of the safety of their communities. The Judicial Branch has avenues in place to ensure court operations at all levels continue.”

Resources:
Indiana Department of Health COVID-19 page
Indiana Supreme Court COVID-19 update page
Indiana State Bar Association COVID-19 page for the legal community
Webinar: COVID-19 Guidance for Individuals & Employers, presented by the Indianapolis Bar Association
Indiana Lawyer Coronavirus Update

Indiana State Bar Association Meetings & Events
ISBA staff began working remotely today, March 16, effectively closing the office space to meetings and visitors. In addition, all in-person events scheduled for March have been cancelled. We will keep you updated on events scheduled for April and May.

In the meantime, business will carry on, but virtually. Feel free to e-mail or call just as you have always done (click here for a staff directory). Although we won’t be able to answer calls directly, we will return them within 24 hours. We remain committed to serving your needs each day.


Top 10 Foreclosure Blogs

The Founder of Feedspot has advised that Indiana Commercial Foreclosure Law is ranked second in its Top 10 listing of foreclosure-related blogs.  Here is a link to the site's list:  Top 10 Foreclosure Blogs & Websites To Follow in 2019.  Thanks to the folks at Feedspot for recognizing my work. 

Merry Christmas and Happy New Year to those who regularly read, or surf to, this blog.  Let's keep it going in 2020....

John   


IBJ.com: Marion County reschedules canceled tax sale for early 2020

The Indianapolis Business Journal is reporting that Marion County (Indianapolis) has canceled its fall real estate tax sales (with a combined value of at least $6MM) due to a clerical error.  The 2019 sales will occur 2/14/20.  Here is the story.  Click here for a post of mine from earlier this year talking about Indiana tax sales and notice-related issues.  The "clerical error" leading to the postponement of the sales appears to be related to perfecting the statutory notice required for the sales to be valid.  Better to have a do over now instead of dealing with potentially hundreds of tainted sales later.    


Indiana General Assembly Update

This follows up my April 12th post Indiana General Assembly: Nothing Cooking This Year.  The sheriff's sale notice legislation I mentioned last month got new life but ultimately did not pass.  The Indiana Lawyer mentions that development (see, "Newspapers survive scare" section) and others in its article this week entitled What lawmakers did — and didn’t do — in the 2019 session.


Indiana General Assembly: Nothing Cooking This Year

My understanding is that there is no currently-pending legislation that would directly impact Indiana's foreclosure-related laws.  At one point, there was debate about sheriff's sale notices, but a Senate panel voted down the sheriff's sale notification bill.  Whether that bill might come back to life remains to be seen.  If anything develops at the end of this year's session, I'll make a point to post about it.

New post coming next week.  Time has gotten away from me this week....


Data Suggests Housing Recovery Complete

Click on the following link for an article from the Jacksonville Daily Record about the status of the recovery from the housing market collapse:  Black Knight data shows the housing recovery finally is complete

The conclusions in the story are consistent with recent comments from one of our mortgage servicer clients.  He told me that virtually all of the foreclosures from the early 2010's have been processed and that the market is back to more normal default levels.

(For a little different spin on the story, here is a link to my 9/6/18 post:  Housing Crisis Revisited In Long-Form Article, With Video)


12 Years And Counting

On November 1, 2006, at age 38, I placed my first four posts on this blog.  (I was on fire that month, with 12 posts.)  Although my production varies from month to month, on Monday, at age 50, I'll submit my 553rd post.  And I have no plans to stop.  Thanks for reading, for the feedback and for the referrals. 

John


Housing Crisis Revisited In Long-Form Article, With Video

First, credit goes to the Indianapolis Business Journal's "Eight @8" daily eNewletter for alerting me to this content.  The eight stories from yesterday, compiled by Mason King, included this in-depth piece from The Penny Hoarder:  "The Amercian Nightmare," which "examines the [foreclosure crisis] impact" a decade later, by Desiree Stennett and Lisa Rowan.  There are lots of interesting perspectives in the story.  Hard to believe it's been ten years since the crash....       


Changes to Rules/Procedures for Marion County (Indianapolis) Sheriff's Sales

Rachel Winkler of the Marion County Civil Sheriff’s Office recently circulated an email to the local foreclosure community of lawyers, investors and bidders about some immediate changes to the local sheriff’s sale rules and procedures. Since the Office wants to spread the word to future participants in the mortgage foreclosure sale process, consider this a public service announcement.

Below is a verbatim copy of her email, and I’ve provided links to the various .pdf’s and the home page:

Greetings Attorneys/Investors/Bidders,

We want to include all because the adjustments we are working on and toward affect all.

Some highlights of these adjustments to our process are:

Interest will now come from Attorneys; please consider including these on the added cost sheet.

Plaintiff Bid Forms; Treasurer’s Tax Clearance Forms; Removal Letters; Assignment of Judgment/Bids and Added Costs Sheets are due no later 3:00 p.m. two business days prior to the respective sale date.

Cost checks for User Fees, Sheriff’s fees and Publication Fees (including Sheriff’s File Number on checks) are also due and requested no later 3:00 p.m. two business days prior to the respective sale date.

Cost checks will now be cashed and applied as part of the Sheriff Sale process. Please be sure to consider these costs as part of the minimum bid amount and Plaintiff’s written bid as applicable.

Attorneys are responsible for preparing all Sheriff’s Deeds, Clerk Returns and Sales Disclosure Forms for all sales including third party purchases.

All information is included in the document called Marion County Sheriff's Sale Real Estate Rules Requirements for Plaintiffs.Attorneys.Revised 05.04.2018.

Bidders, please come with document Marion County Sheriff's Sale Real Estate Sales Disclosure Information.Revised 05.4.2018 already prepared for each property you plan to purchase. If the property is sold to you, please submit the corresponding document at the completion of the oral auction.

Please visit our website: http://www.indy.gov/eGov/County/MCSD/Services/RealEstate/Pages/home.aspx

Please direct your questions, comments and concerns to myself, Rachel.Winkler@indy.gov 317-327-2420 and Lori, Lori.Wyeth@indy.gov 317-327-2405.

More to follow…

Rachel Winkler
Marion County Sheriff's Office
Judicial Enforcement Division
200 E. Washington St.
Suite 1122
Indianapolis, IN 46204
Office – (317) 327-2420
Fax – (317) 327-2465
rachel.winkler@indy.gov

Here are the other .pdf’s that Ms. Winker attached to her email:


Marion County (Indianapolis) Civil Sheriff's Office Changes

Foreclosure sales for Indianapolis properties occur through the Marion County Civil Sheriff’s Office. We recently received word of a handful of changes within the department.

First, Tammy Pickens is leaving at the end of the year. Tammy was a pro, was great to deal with and will be missed.

Second, Beth Ash, Rachel Winkler and Laurie Gipson will be the contacts for sheriff’s sales going forward. Here is their contact information:

Laurie Gipson
317-327-2450
Email: Laurie.Gipson@indy.gov<mailto:Laurie.Gipson@indy.gov>

Beth Ash
317-327-2459
Email: Elizabeth.Ash@indy.gov<mailto:Elizabeth.Ash@indy.gov>

Rachel Winkler
317-327-2420
Email: Rachel.Winkler@indy.gov<mailto:Rachel.Winkler@indy.gov>

Laurie’s email about these changes emphasized that parties should include all three contacts in any emails. Otherwise, there could be a delay of questions, concerns and/or documents being received.

Click here for the sheriff's Real Estate Sales website, with relevant links/forms.  As I’ve said before, there is no better run County agency than our civil sheriff’s office. The staff is always professional, courteous and prepared.

Happy Thanksgiving.


Indiana Trial Rule 9.2(A) Officially Amended But Uncertainty Remains

Back in May, I submitted this post: Claim “On An Account” Vs. Enforcement Of A Loan: Comments On Proposed Amendment to Indiana Trial Rule 9.2(A). One of my points was that the proposal left open the question of whether the rule applied solely to accounts, or to both loans and accounts. Indeed my post doubled as a submission to the Rules Committee recommending, among other things, language clarifying that the new rule does not (and should not) apply to loans, other than perhaps credit card debt.

New rule. On October 31st, the Indiana Supreme Court entered its official Order Amending Indiana Rules of Trial Procedure that included amendments to Rule 9.2. Here is the order signed by Chief Justice Rush. Regrettably, the amendment did not incorporate our proposed limiting language or otherwise resolve the matter of whether a plaintiff must file the new affidavit of debt in mortgage foreclosure cases. For reasons spelled out in my May 11th post, a strong argument still can be made that the affidavits only need to be filed with complaints articulating an action “on account” and that a mortgage foreclosure, or any other action to enforce a promissory note, is no such action. Admittedly, however, the situation remains clouded.

Consumer debts only. One critical change the Supreme Court made from the proposed rule was to limit the pleading requirement in Section (A)(2) to consumer debts. The rule’s requirement for the new affidavit applies only “if … the claim arises from a debt that is primarily for personal, family, or household purposes…” This is a common phrase in the law that identifies consumer claims and that excludes commercial/business debts. See my 12/18/09 and 11/16/06 posts. Thus the Supreme Court’s insertion of that language definitively means that Rule 9.2(A)(2) does not apply to commercial foreclosures or to the collection of business debts.

Effective date. It will be interesting to see how lawyers and judges interpret and apply Rule 9.2(A)(2), which is brand new. Again, and meaning no disrespect whatsoever, I think the Supreme Court left the scope of that subsection open for debate. We have time to digest this further as the amendment does not take effect for over two years - until January 1, 2020.


Indiana Supreme Court Order Amending Rules Regarding Service Of Process And Execution Sales

On July 31st, the Indiana Supreme Court entered this Order Amending Rules of Trial Procedure.  The changes become effective 1/1/18.  

The order makes a slight amendment to Rule 4.1(B) dealing with "copy service" and now requires a follow-up mailing of both the summons and the complaint.  For more on service of process matters, including copy service, read my post “Service Of Process” Fundamentals For The Plaintiff Lender.

The order also modifies Rule 69(A) dealing with execution sales and does away with the requirement that the subject real estate must first be appraised and then sell for at least two-thirds of the appraised value.  For a little more information on execution sales, check out my post The Difference Between An Execution Sale And A Foreclosure Sale In Indiana.

Incidentally, I have not yet seen a determination by the Indiana Supreme Court on the proposed changes to Rule 9.2(A) that I discussed in my 5/11/17 post.  


IndyStar: Rent-to-own contracts challenged in federal court

Yesterday, The Indianapolis Star picked up the story discussed by the IBJ that was the subject of my 5/31/17 post, New Spin On Alleged Predatory Lending: Land Contracts.  Here is a link to the IndyStar piece:  6/26/17 article.  

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If you are involved in a land contract dispute or wish to obtain advice about land contracts on the front-end, please email me at John.Waller@WoodenMcLaughlin.com or call 317-639-6151. Also, don't forget to follow me on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to my blog posts via RSS or email as noted to your left.


IBJ: "Scrappy insurer continues pursuit of $25M judgment from Symons family"

Last week, Greg Andrews of the Indianapolis Business Journal wrote about the ongoing judgment enforcement action pending in the U.S. District Court for the Southern District of Indiana.  Click here for the latest IBJ.com article.  Our firm is local counsel for the judgment creditor.  Our coordinating counsel, Bressler, Amery & Ross out of Florham Park, NJ, has taken the lead with the judgment collection efforts described in the news piece.     


In Wake Of Marsh Bankruptcy, Commercial Foreclosures: IBJ.com

The Indianapolis Business Journal reports that "Landlords across Indiana are feeling the pain from the collapse of Marsh Supermarkets...."  Here is a link to the full article: Landlord's Marsh bet leaves trail of foreclosures

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I represent parties, including borrowers and guarantors, in commercial mortgage foreclosure disputes.  If you need assistance with a similar matter, please call me at 317-639-6151 or email me at john.waller@woodenmclaughlin.com.  Also, don’t forget that you can follow me on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted to your left.  


New Spin On Alleged Predatory Lending: Land Contracts

The Indianapolis Business Journal's website has a report today regarding a lawsuit recently filed here in Indiana that targets a “predatory and unlawful rent-to-own scheme.”  The lawsuit seeks class-action status on behalf of the alleged victims of the scheme and claims violations of "several fair housing, equal credit opportunity act, truth-in-lending and condition-of-premises laws." 

Here is a link to the article: Lawsuit targets local rent-to-own housing operator.  Evidently the Indiana Attorney General sued the same operator  back in 2012 for similar claims and "for allegedly running a rent-to-buy scheme meant to avoid Indiana's landlord tenant law."  See: Ind. AG Zoeller suing Rainbow Realty.

Although I have not read the complaints or reviewed the "rent-to-own" contracts, the transactions in question would seem to be land contracts.  Indiana law views these types of agreements as a kind of hybrid of a lease and a mortgage loan.  I've written about land contracts in the following posts:

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If you are involved in a land contract dispute or wish to obtain advice about land contracts on the front-end, please email me at John.Waller@WoodenMcLaughlin.com or call 317-639-6151.  Also, don't forget to follow me on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to my blog posts via RSS or email as noted to your left.    

 


Claim “On An Account” Vs. Enforcement Of A Loan: Comments On Proposed Amendment to Indiana Trial Rule 9.2(A)

Proposed rule change.  Indiana’s Committee on Rules of Practice and Procedure has before it a proposal to amend Trial Rule 9.2(A). To see the proposed change, click here.  The amendment also has changes to the form affidavit of debt found in Appendix A-2 of the rules.  Application of the added language appears to be limited to actions “on an account” and does not seem to relate to actions involving loans, such as breaches of promissory notes or security agreements like mortgages. Although the amendment does not expressly target mortgage foreclosure cases or the enforcement of UCC security interests, the proposed language arguably leaves the rule open to interpretation as to its scope.  As such, we are respectfully recommending that the Committee clarify the proposed amendment to confirm that the new subsections (A)(1) and (2) are limited to claims “on an account” and do not apply to loans.

What is an action “on an account?”  To my knowledge, and based on some very limited legal research, there is no specific Indiana statutory definition of, or statutory cause of action for, an action on an account.  Black’s Law Dictionary defines “on account,” in part, as “a sale on credit.”  Indiana Practice, Procedural Forms with Practice Commentary (Arthur), Chapter 9, discusses “Complaints-On An Account” and says: “an action on account is one upon which billings have been sent to the other party specifying the goods or services delivered and the amount due….” Section 9.1 identifies the following elements of such an action:

1. A description of the account and the nature of the dealings between the parties;
2. The goods and services were provided to defendant at his request;
3. Defendant is indebted to plaintiff for a specified sum; and
4. The account is due and unpaid.

Not a loan.  An account and a loan are two different animals. Black’s Law Dictionary defines a loan, in part, as “delivery by one party to and receipt by another party of a sum of money upon agreement, express or implied, to repay it with or without interest.” Although an account and a loan both might be considered “debts,” they arise out of dissimilar transactions.  With a loan, one party (a lender or a creditor) gives money to another party (a borrower or a debtor).  Obvious examples of this are banks funding the purchase of a car or a house.  On the other hand, an account is born out of one party (seller/vendor) giving, not money, but rather goods and/or services to the other party (buyer/vendee).  A classic example of an account is a hospital bill.

Written contracts.  Certainly a written contract could exist for an account, and the contract conceivably may result in some kind of lien, but ultimately the nature of an account does not involve the transfer of money but rather the provision of goods or services.  But frequently there is not a written agreement - only an invoice or purchase order.  In fact, there may not be any written document at all, like when I mowed lawns in high school.  As such, unlike with promissory notes or mortgages, when a debt arising out of an account is sold or assigned from the original account holder to a third party, proof of the account creditor may be unclear or perhaps non-existent.  This absence of documentation makes the collection of such debts susceptible to fraud, or at least to questions about who is owed the money.

The target.  In our view, the new Rule 9.2(A) seems to focus on a plaintiff’s obligation to establish that it has the right to enforce the debt.  We understand the amendments proposed to Rule 9.2(A) may arise, in part, out of bad actors attempting to collect debts based on an account.  These debt collectors often purchase debt at a discount and specialize in trying to collect it. We further understand that some of these debt collectors may be fraudsters that either don’t actually own the debt or try to collect the debt long after the statute of limitations has run.

Protections unnecessary.  While claims “on an account” arguably need the protections afforded by the new subsection to the rule, claims for breaches of loan documents do not.  Indeed, protections already are in place. Article 3.1 of Indiana’s UCC dealing with Negotiable Instruments (promissory notes), Article 9.1 involving secured transactions, Ind. Code 32-29 (Mortgages), Ind. Code 32-30-10 (Foreclosure Actions), well-settled case law, and a plethora of other rules, laws, and regulations, both state and federal, at present cover questions surrounding proof of standing and the right to enforce.  See, for example, my post Proving You’re The Holder Of The Note. This makes the proposed amendment unnecessary for loans and, even more, contradictory to existing law and procedure, not to mention onerous.  Indeed some of the proposed requirements may not even be possible for certain assignees to meet, such as a listing of all prior owners of the loan.  (The Indiana Supreme Court's opinion in the Barabas case from 2012 that surrounds MERS is instructive here.)       

Solution.  Without clarification that the new rule is limited to claims on an account and thus does not apply to loans, courts will be confused as to how to handle such cases, which could create more problems than the rule seeks to solve. We’ve seen one very simple yet meaningful change that could be made to the proposed amendment.  The mere insertion in Subsection (2) of “and the claim is on account” after the word “if” and before the words “the plaintiff” should be sufficient to clarify that the new rule does not apply to loans.  Even better, if at the end of the proposed amendment, the rule said something like “Subsection (2) does not apply to actions to enforce loans, including but not limited to promissory notes or credit agreements,” then the lending and finance communities should have no issue whatsoever with the amendment.

Call to action.   The Committee invites public comment on the proposed rule amendments.  Those wishing to comment should do so, in writing, not later than May 15, 2017.  That's Monday. Comments may be sent by email to RulesComments@courts.in.gov or addressed to:

ATTN: Rules Committee
Hon. Mary Willis
Indiana Office of Judicial Administration
30 South Meridian Street, Suite 500
Indianapolis, IN 46204

If you work for a lender or are an Indiana lawyer who represents creditors in commercial or consumer finance, and if you agree with our position, then we invite you to submit a comment by next Monday – even if it’s just to state briefly that you generally agree with the points outlined here.  I’m planning on emailing a link to today’s post directly to the committee’s staff. If you have any questions or comments, please call me at 317-860-5375 or email me at John.Waller@WoodenMcLaughlin.com.  Thanks.  

 


10 Years: Indiana Commercial Foreclosure Law

I launched this blog on November 1, 2006.  Ten years and 479 posts later, I'm still committed to writing about mortgage foreclosures, lien enforcement and business debt collection. 

Here are links to my first four articles, all of which I posted here ten years ago today:

Welcome To My Blog: Indiana Commercial Foreclosure Law

Just What Is Commercial Foreclosure Law?

What Are Statutes And Which Ones Apply To Indiana Commercial Foreclosures?

Court Commentary = Case Law

In addition to focusing on commercial matters, my practice has evolved to include more consumer finance litigation in which I defend residential mortgage loan servicers and their investors (lenders) in a wide variety of foreclosure and real estate-related litigation.  As such, I've expanded my blog topics to address those matters.  If you need assistance with commercial or consumer finance litigation in Indiana, please call me at 317-639-6151 or email me at john.waller@woodenmclaughlin.com.  Also, you can receive my posts on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted on my home page.  Thanks for reading these past ten years.

John

 

 


PHH v. Consumer Financial Protection Bureau: Opinion

Last Tuesday the 11th, the United States Court of Appeals for the District of Columbia Circuit issued its 110-page opinion in PHH v. Consumer Financial Protection Bureau.  If you'd like to read the entire decision, here it is.

This is all over the news. Essentially, the Court held that the structure of the CFPB is unconstitutional.  Big news.  I won't post the news articles here because a separate Google search will provide you with plenty to read.  But, as one example, here is what George Will, one of my favorite columnists, wrote about the result:   Congress insists on making itself irrelevant

The CFPB really has no involvement with commercial foreclosure issues.  It does, however, have a great impact on residential/consumer mortgage lenders and their servicers, which our firm represents in a variety of matters here in Indiana. 


Indiana Commercial Court Pilot Project And Interim Rules

Yesterday, the Indiana Supreme Court issued interim rules related to Indiana's effort to form specialty commercial courts, about which I mentioned here in June and August of last year.  This program and these rules would apply to commercial foreclosures.   Click here for the rules.

One of our Firm's summer associates, Jedidiah Bressman, prepared a summary of the rules.  Thanks to Jedidiah for his contribution to my blog.

General Notes

There are six commercial courts handling specialized dockets of business cases.  The pilot project establishes these courts for business disputes in which parties agree to have their cases resolved:

• Allen Superior Civil Division Judge Craig Bobay;
• Elkhart Superior 2 Judge Stephen Bowers;
• Vanderburgh Superior Judge Richard D’Amour;
• Floyd Superior 3 Judge Maria Granger;
• Lake Superior Judge John Sedia; and
• Marion Superior Civil Division 1 Judge Heather Welch.

Commercial Courts employ and encourage electronic information technologies, such as e-filing, e-discovery, telephone/video conferencing, and employ early alternative dispute resolution interventions, as consistent with Indiana law.

Cases Eligible For Commercial Court Docket (CCD)

Any civil case, including any jury, non-jury case, TRO, injunction, restraining order, class action, declaratory judgment, or derivative action, shall be eligible for assignment into the CCD if the case relates to:

1. The formation, governance, dissolution, or liquidation of a business entity
2. Rights, obligations, liabilities, or indemnities of owners, shareholders, etc.
3. Agreements involving a business entity and an employee, member of the business entity, etc.
4.  Disputes between or among two or more business entities or individuals as to their business activities relating to contracts, transactions, or relationships between or among them, including without limited to:

a. Any transactions governed by the UCC, except for Consumer claims against business entities or insurers of business entities and Consumer Debts.
b. Cases relating or arising under antitrust laws.
c. Cases relating to securities or relating to or arising under securities laws.
d. Commercial insurance contracts, including coverage disputes.
e. Environmental claims arising from breach of contract or legal obligations or indemnities between business entities.
f. Cases with a gravamen substantially similar to the previous and not otherwise disallowed by Commercial Court Rule 3.
g. Subject to the acceptance of jurisdiction over the matter by the Commercial Court Judge, cases otherwise falling within the general intended purpose of the Commercial Court Docket wherein the parties agree to submit to the Commercial Court Docket.

Cases Not Eligible For CCD

1. Personal Injury;
2. Consumer Claims;
3. Matters involving only wages or hours, occupational health or safety, workers’ comp, or unemployment;
4. Any environmental claims not already established;
5. Eminent domain;
6. Any employment law cases not already established;
7. Discrimination cases based on federal or state constitutions;
8. Administrative agency, tax, zoning, and other appeals;
9. Petition Actions; strategizing;
10. Individual residential real estate disputes;
11. Any matter subject to the domestic relations, juvenile, or probate division of a court;
12. Any matter subject to the exclusive jurisdiction of a city court, a town court, or the small claims division of a court;
13. Any matter required by law to be heard in some other court or division of a court;
14. Any criminal matter, other than criminal contempt in connection with a matter pending on the Commercial Court Docket;
15. Consumer debts.

Steps To Get Into The CCD

1. If case is eligible and a party seeks to have the case assigned to the CCD, the attorney representing that party shall identify the case as a “CCD case” by filing with the clerk of the court a “Notice Identifying CCD Case” (“Identifying Notice”).
2. If a party does not consent a “Notice of Refusal to Consent to Commercial Court Docket: (“Refusal Notice”) must be filed within 30 days after service of the Identifying Notice; or 30 days after the date the non-consenting party first appears in the case.
3. If Identifying Notice is filed: (a) the clerk of court shall assign the case to the CCD, which assignment is deemed a provisional assignment; (b) if no Refusal Notice is timely filed by any party that has appeared in the case, the assignment of the case is deemed permanent; and (c) if a Refusal Notice is timely filed, the clerk shall transfer and assign the case to a non-CCD in accordance with applicable Rule.
4. If new trial is granted; or after remand is granted, the steps of getting into the CCD start over again.
5. The CCD judge has final say over whether a case is deemed appropriate for the CCD and can send a case back to a non-CCD in accordance with applicable rule. The judge’s determination shall not be subject to appeal.

General Notes About Getting Into CCD

1. This can be done at any time. (Of course, all parties must agree.)
2. This includes if a case becomes eligible for the CCD after a cross-claim, etc.
3. The Commercial Court Rules are limited to cases filed after June 1, 2016.  Cases already pending cannot be transferred.
4. Rule 4(C)(2) is the same as used in Trial Rule 3.1(B).


RIP

There is a park that is known
4 the face it attracts
Colorful people whose hair
On 1 side is swept back
The smile on their faces
It speaks of profound inner peace
Ask where they're going
They'll tell U nowhere
They've taken a lifetime lease
On Paisley Park


The girl on the seesaw is laughing
4 love is the color
This place imparts (Paisley Park)
Admission is easy, just say U
Believe and come 2 this
Place in your heart
Paisley Park is in your heart


There is a woman who sits
All alone by the pier
Her husband was naughty
And caused his wife so many tears
He died without knowing forgiveness
And now she is sad, so sad
Maybe she'll come 2 the park
And forgive him
And life won't be so bad
In Paisley Park


The girl on the seesaw is laughing
4 love is the color
This place imparts (Paisley Park)
Admission is easy, just say U
Believe and come 2 this
Place in your heart
Paisley Park is in your heart


See the man cry as the city
Condemns where he lives
Memories die but taxes
He'll still have 2 give
(who) Whoever said that elephants
Were stronger than mules?
Come 2 the park
And play with us
There aren't any rules
In Paisley Park


The girl on the seesaw is laughing
4 love is the color
This place imparts (Paisley Park)
Admission is easy, just say U
Believe and come 2 this
Place in your heart
Paisley Park is in your heart


The girl on the seesaw is laughing
4 love is the color
This place imparts (Paisley Park)
Admission is easy, just say U
Believe and come 2 this
Place in your heart
Paisley Park is in your heart


Your heart, your heart
Paisley Park
Your heart, your heart, your heart (sing, sing it)
Paisley Park
Paisley Park
Paisley Park


Alleged Tax-Sale Scam At Heart of Indiana AG's Suit

News broke earlier this week about alleged tax-sale schemes committed by three different companies within the context of Indiana tax sale proceedings.  Here are links to the stories:

    The Indianapolis Star:  Indiana Attorney General Greg Zoeller files suit in tax-sale scam

    Indianapolis Business Journal:  Indiana AG sues 3 companies in alleged tax-sale scheme

The media has been all over alleged problems with Indiana's tax sale system of late.  As a reminder, here is a link to my 12/15/15 post:  Indianapolis Star Series: Blight Inc. - Examining Indiana's Tax Sale System


Indiana's Current Lending Climate

The Indianapolis Business Journal has a good report this week with respect to what's cooking in the local lending world.  Here is a link to the piece:  Hoosier banks put bad-loan woes in rearview mirror.  Jared Council's article has some insightful quotes from a handful of Indiana's bank executives and analysts.  In short, unsurprisingly commercial foreclosures are way down, but growth appears to be slower than expected.    


Indiana State Courts Moving Ahead With Electronic Filing

Indiana’s state court electronic system has gone from a crawl to baby steps.  The grand plan is for a state-wide e-filing system by the end of 2018:

IBJ.com:   Indiana courts push ahead with shift to e-filing system

The Indiana Lawyer.com:  6 counties next in line for trial court e-filing

The federal court system has had e-filing for years through Pacer (Public Access to Court Electronic Records), which “allows users to obtain case and docket information online from federal appellate, district, and bankruptcy courts….”  Indiana’s system presumably will have the same mission, except that Pacer charges a minimal fee for access to certain court documents.  Indiana’s service will be free. 

E-filing is great for lawyers, their staffs and, as a result, their clients, because pleadings and other court papers can be filed over the internet instead of delivering paper to the courthouse.  An added benefit is that these court filings can be accessed by anyone at any time.  Stephen Creason, chief counsel of the state Attorney General office’s appeals division, told The Indiana Lawyer

Essentially the clerk's office doors are going to be open electronically, on the Internet, 24-7, 365 days a year, at no cost….  So, the public can find out what the business of the courts is and what is going on in the court system.

As 2015 comes to a close, I’d like to wish you a Happy New Year.  Thanks for checking in this year.


Indianapolis Star Series: Blight Inc. - Examining Indiana's Tax Sale System

The Indianapolis Star recently ran a series entitled "Blight Inc." that tackled the issue of "how our government helps investors profit from neighborhood decay."  The series has eight separate in-depth articles written by reporter Brian Eason.  All of the work can be accessed via IndyStar.com at this link: Bright Inc.  Mr. Eason and I’m sure others at the Star clearly worked hard in putting together a thorough investigation and analysis of Indiana’s real estate tax enforcement system.

Because I sometimes write about tax sales (see Category to right), I thought my readers and other surfers might want to know about the series.  Lots to read.  It’s impossible for me to comment in any detail on such a big project as Blight Inc. other than to point out that the series, in part, highlights a county’s struggle with, on the one hand, the need to collect delinquent real estate taxes and, on the other hand, the need to rehabilitate (or raze) abandoned properties.  Here is a quote from the last article in the series that summarizes the problem, according to the Star:

The Star’s investigation into abandoned housing revealed how Indiana’s tax sale system is undermining both public and private efforts to rehab distressed neighborhoods. The Star found that county treasurers across the state repeatedly sold run-down houses to investors who did not want them, and later let them go back to tax sale. Meanwhile, the system allowed a handful of large investors to amass hundreds of houses from county sales. But in the absence of any requirements that they rehab the homes, many have fallen further into disrepair, costing the city millions of dollars in code enforcement, maintenance and emergency runs.

As an aside, interestingly, the Star quoted state Sen. Jim Merritt, R-Indianapolis who suggested blight could curtailed by making Indiana a non-judicial foreclosure state:

Merritt pointed to another culprit [of blight] the length of the states mortgage foreclosure process, which he thinks contributed to the huge number of vacant properties following the housing crisis. He wants to move Indiana away from its judicial foreclosure process toward a [faster] non-judicial system, as is used in both California and Texas.

Due in part to the Star’s work, Indiana lawmakers will be looking at reforming Indiana’s tax sale system.  The nature of the reforms is not altogether clear or settled.  If and to the extent changes to Indiana’s tax sale or foreclosure systems are made, particularly if they effect commercial real estate, I’ll write about them here.

What remains unclear to me is how a county can collect delinquent taxes without publicly auctioning off the subject real estate to the highest bidder, whoever that may be.  While I agree that abandoned housing and blight (even commercial property blight) are serious problems, I’m not fully convinced that the tax sale system is to blame.

 


Indiana Commercial Courts Still In The Works

On June 3rd, I posted Indiana Moving Forward With Plan For Specialty Commercial Courts.  The latest Res Gestae, which is the journal for the Indiana State Bar Association, has a piece about the initiative.   Here is a .pdf of the article.  Since these courts presumably will handle commercial foreclosures, I'll continue to provide updates as I learn of them.    


2015 Indiana Legislation: Uneventful

In the end, the Indiana General Assembly's 2015 session did not produce any meaningful foreclosure-related legislation or any amendments to prior foreclosure-related state laws.  As I wrote this Spring, there were some fireworks pertaining to SB 415, but the only thing that really arose out of the signed SB 415 was the creation of a state preemption of any local ordinance that involves foreclosures.  Quiet year. 


Indiana Moving Forward With Plan For Specialty Commercial Courts

Both the Indianapolis Star and the Indiana Lawyer have news about Indiana’s ongoing discussions to establish courts to handle commercial cases only, including presumably commercial foreclosures.  For details, click on these links: 

    Plan to establish commercial courts in Indiana moves forward

    Indiana seeks to establish commercial courts

This is a great idea, and I hope it comes to fruition.  As lawyers become more specialized, so too should judges if possible.  The new courts should help lenders, borrowers and guarantors alike.  Time and expense will be saved.  Hopefully by 2016 this will be a reality.   


The Indiana Lawyer.com: Legal Blogging

Marilyn Odendahl of The Indiana Lawyer wrote nice little piece about local law bloggers:

    Attorneys turn to blogs to market their services, find clients and express themselves

The article mentions my blog and has a couple quotes from yours truly.  As I told Ms. Odenhahl during the interview, my only regret is not having a sexy name, such as The Forecloser or Lord of the Liens.  Too late now.

More Indiana Commercial Foreclosure Law in a day or two....


Promissory Note Defaults Lead To Criminal Prosecution

The Indianapolis Star is reporting that local developer Lee Alig is "facing 20 felonies after prosecutors say he received thousands of dollars of funds from victims through promissory notes he was unable to pay."  The article goes on to state that the Marion County Prosecutor is alleging Alig "took personal profits from eight promissory notes, totaling $340,000 ... [and] had neither the ability to repay those funds nor ownership of the collateral offered as security for those notes."  Although there are few details in the story, the situation is remarkable and potentially frightening for borrowers/guarantors because it seemingly stands in contrast to Indiana civil/constitutional law holding that Jail Time Is Not An Available Remedy In Collection Actions In Indiana.