In re: Mortgage Foreclosure Cases (Amicus Brief)
Like many states, Rhode Island remains mired in a foreclosure crisis. The crisis has taken hold of Rhode Island federal court’s docket; the number of foreclosure-related cases before the court has exploded from a nominal number in prior years to a total of 752 cases active during 2012. In order to deal with this expanding docket in an equitable and efficient way, the court used its authority to establish a settlement conference process. An appointed Special Master is now helping borrowers and lenders negotiate affordable loan modifications that restore value to distressed mortgage loans and keep families in their homes. Although many are currently using the program successfully to negotiate alternatives to foreclosure, some of the banks in the case have challenged the court’s program.
The Brennan Center filed an amicus brief in the First Circuit Court of Appeals supporting the Rhode Island district court’s program. An economic analysis of the program, which is overseen by former Bank of Rhode Island President and CEO Merrill Sherman, demonstrates the net benefit to families, the housing market, investors, and the economy by avoiding losses due to preventable foreclosures.
The brief explains that the district court acted legally because “the court had inherent authority” to establish such a mutually beneficial program “in order to manage its docket fairly and efficiently.” The brief, co-authored by Mark Ladov, Matt Menendez, along with the National Consumer Law Center and Rhode Island Legal Services, was also signed onto by Direct Action for Rights and Equality and the Housing Network of Rhode Island. The court will hear argument in the case on February 5, 2013.