By John Byrne, Post-Tribune staff writer
INDIANAPOLIS -- A $2 million fund for counseling to help keep Hoosiers in their homes would be subsidized by the banks and other lenders now filing tens of thousands of foreclosures each year in Indiana under a bill that passed a Senate committee Wednesday.
The proposal assesses a $50 fee to every foreclosure filing in the state, and directs it to housing organizations to cover the costs of various services homeowners can use to try to work out a deal with mortgage holders.
The Senate Judiciary Committee passed the fee among several foreclosure bills it considered Wednesday.
Stephanie Reeve of the Indiana Housing and Community Development Authority told the committee there were 43,000 foreclosures in the state in 2007, seventh-most in the nation.
The counseling agencies are already at work around the state, Reeve said, but the funding would help expand the program.
Sen. Lonnie Randolph, D-East Chicago, asked Reeve why there aren't more agencies providing such services to protect homeowners in Northwest Indiana.
"In theory, I think it's great, but I want it to work," Randolph said. "I have not seen it in my county at all, and there are a lot of foreclosures in Lake County."
Sen. Brent Steele, R-Bedford, predicted the housing counseling business will grow if this bill passes, but for the wrong reasons.
"I can see three in every county before this is over with," Steele said. "I just see you growing your industry."
The bill will next head to the Senate Appropriations Committee because of the large price tag for the program.
The committee also agreed to order former landlords of small buildings who have lost their properties to foreclosure to notify tenants of the foreclosure judgment. The tenants would then have the right to terminate their leases and find somewhere else to live.
The legislature is considering the bill and others like it because renters around the state have complained they didn't know the property in which they lived had fallen into foreclosure until the new owner told them they had to move out.
The notification bill would not apply to renters in buildings with more than four units. Lobbyists for banks argued successfully that banks want tenants to stay in such buildings to drive up the properties' worth, and do not attempt to evict people.
The notification bill will next head to the full Senate for further consideration.