Uncontested foreclosure cases on the rise in Lake County

By Marisa Kwiatkowski, Times of Northwest Indiana
marisa.kwiatkowski@nwi.com

Most down and out region homeowners aren't battling mortgage foreclosures in court, a Times review of county court records shows.

Nearly 60 percent of foreclosure cases in Lake and Porter counties are disposed of by default judgment, meaning the homeowners never contacted the court or showed up for hearings, county court statistics show.

Lake County judges told The Times about 90 percent of their mortgage foreclosure cases are decided on paper.

"I can't even recall having a hearing in the last year," Lake Superior Court Judge Diane Kavadias Schneider said of residents' involvement. "It's a really bad situation, but I'm hopeful it's going to get better."

Stephanie Shappell Katich, head of Indiana Legal Services' foreclosure defense unit, said homeowners sometimes believe they deserve to be kicked out because they haven't paid their mortgages. Others don't understand the legal documents that are sent to them.

Homeowners in foreclosure who were contacted by The Times either did not return phone calls seeking comment or declined to be interviewed, saying they were embarrassed.

Officials blame predatory lending and a faltering economy for the steady increase in mortgage foreclosure cases.

Foreclosure filings have increased every year since 2002 -- the first year such cases were put in a separate category by the state court administration. More than 43,800 cases were filed statewide in 2007, which is 47.3 percent higher than 2002, state data shows.

Some region legal officials say there is more homeowners can be doing before throwing in the towel.

Taking action

Both the state courts and Legislature are working to stem the number of residents displaced by foreclosure.

The Legislature is considering a bill that would require mediation before or during mortgage foreclosure cases. The hope is residents will be able to negotiate loan modifications that keep them in their homes.

Marion County recently issued a local rule that requires creditors to offer settlement conferences for owner-occupied residential foreclosures.

Chief Lake Superior Court Judge John Pera said Lake County judges are considering creating a similar requirement but will wait on the Indiana Legislature.

What homeowners can do

Darrolyn Sharp, director of Consumer Credit Counseling Service of Northwest Indiana, said residents need to act before a foreclosure case is filed.

"The first thing they need to do is admit, if it's not a problem, it's a potential problem before it becomes the point of no return," she said.

Katich said an upside to the mortgage foreclosure crisis is the attention cases now are being given.

"It's more than simply a question of did you make your mortgage payment," she said. "There are legal defenses."

She urged homeowners to contact attorneys as soon as foreclosure cases land in court.

"Get a lawyer," she said emphatically. "Get a lawyer. ... the minute that complaint is filed. Every day you wait you are further jeopardizing the defense and your rights."