(Statehouse) October 12, 2007-The Interim Study Committee on Mortgage Lending Practices and Home Loan Foreclosures held its second meeting at the Statehouse yesterday. The committee, which includes state Representative Woody Burton (R-Greenwood) and a bi-partisan panel of legislators, is charged with studying ways to decrease the foreclosure rate and reduce mortgage fraud in Indiana. "According to a recent study done by a real estate information company, Indiana is one of the top 10 states with the highest foreclosure rates in the nation," said Burton. "It is obviously a huge problem. It is important that we find a solution to this problem in a timely and responsible manner. By studying the issue in depth, we will be able to create meaningful legislation for the 2008 legislative session that will attempt to address this issue." At the meeting, a number of experts in the field spoke about regulatory and educational solutions to this problem. Executive Director of the Indiana Housing and Community Development Authority Sherry Seiwert discussed the creation and implementation of a program to provide free mortgage foreclosure counseling and education to homeowners who have defaulted on or are in danger of defaulting on the mortgages on their homes. The program is a result of legislation co-authored by Burton in the 2007 legislative session. The program is expected to help more than 30,000 homeowners in the next year. John Weicher from the Hudson Institute spoke about the growth of sub-prime lending in the state. Sub-prime lending is a term used to describe mortgages that are given to borrowers who are below the standard of an ideal loan candidate. Sub-prime lenders target consumers with poor credit histories and unfortunate financial situations. The low and/or zero down payment offers and accessibility of sub-prime loans easily attract the target consumers. However, sub-prime mortgages are risky investments, often leading to rapidly increasing interest rates, which lead to foreclosures. Because of the serious financial risk involved with sub-prime loans, many lenders are doing away with this type of mortgage, which according to Burton, is a step in the right direction. The final meeting of the Interim Study Committee on Mortgage Lending Practices and Home Loan Foreclosures will take place on October 30 at 10 a.m. in the Senate Chambers. Committee members will be discussing mortgage and foreclosure legislation that they are drafting for the 2008 legislative session. For more information on this issue or any other, contact Representative Woody Burton at h58@in.gov or 1-800-382-9841.
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