Indiana lawmakers continued their efforts Wednesday to craft a bill that nudges lenders to negotiate with homeowners who are behind on their mortgage payments before initiating foreclosure.
The House Finance Committee heard testimony on Senate Bill 492 that would allow borrowers to ask to be in the same room - or at least on the phone - with someone with the authority to restructure their home loan.
The legislation doesn't require lenders to give borrowers a break, but supporters said just getting the two sides together would help because when homes are foreclosed upon, both sides lose.
Sen. Karen Tallian, D-Portage, evoked the classic movie "It's a Wonderful Life" as she explained why it's difficult to renegotiate deals with lenders.
"The lender is no longer Jimmy Stewart at the Bedford Falls Savings and Loan, and the attorney is no longer the guy down the street," she said.
Borrowers and their attorneys sometimes spend months attempting to contact out-of-state lenders, Tallian said.
Once they do get someone on the phone, she said, that person might not even have the authority to negotiate a settlement.
"It simply appears that no one is in charge," Tallian said.
The bill doesn't require a pre-foreclosure conference, but it does mandate that lenders show up if borrowers request one.
"This at least gives an opportunity to get these people at the table to get a settlement worked out," Tallian said.
House members didn't vote Wednesday on Senate Bill 492, which is one of several efforts to drive down Indiana's foreclosure rate that in February ranked 13th in the nation according to RealtyTrac, an organization that closely monitors foreclosure data.
Indiana Chief Justice Randall Shepard is spearheading efforts to train lawyers and judges to mediate settlement talks. Marion County Superior Court Judge Cynthia Ayers told lawmakers of a similar program to put such settlement conferences into place in the state's most populated county.
She said last year that 20 people requested conferences, and 10 of those were settled successfully.
Rep. Gail Riecken, D-Evansville, also is making a push to slow Indiana's foreclosure rate with House Bill 1176, which also has advanced this year.
On Wednesday, the House finance panel amended many of the provisions in Riecken's bill into Senate Bill 492.
That legislation, backed by the attorney general's office, would make a list of changes including requiring foreclosure consultants to keep all records for three years.
The House panel didn't vote Wednesday. Committee Chairman Jeb Bardon, D-Indianapolis, said he's confident a final version will come into focus soon.
"We're still working on it," he said. "But we're getting close."