PROVIDENCE, R.I. -- A federal judge who appointed a special master to help mediate hundreds of foreclosure disputes in Rhode Island's courts said Tuesday he's "incredibly pleased" with the process so far, but is looking for ways to improve it.
U.S. District Judge John McConnell Jr. said Tuesday morning after hearing a progress report from special master Merrill Sherman that it's in the best interests of homeowners and mortgage providers to reach settlements outside of court and that he appreciates both sides' good faith negotiations.
Sherman, the former CEO of Bank Rhode Island, told McConnell she has held 131 settlement conferences so far and expects to conduct more this year. Settlements haven't yet been reached in most cases; requests for loan modifications are pending in the majority of them.
Sherman told McConnell there's "a little bit more room for me to be more persuasive" in mediating the disputes.
Hundreds of homeowners in the state have sued, saying their mortgage foreclosure proceedings were fraudulent or flawed. McConnell last year ordered a stay of the cases and in January appointed Sherman to bring the parties together to try to reach settlements that would keep people in their homes.
George Babcock, an attorney representing many of the plaintiffs, on Tuesday called the process a "guiding light." But several defense attorneys, who have challenged the legality of the settlement process, told McConnell they'd like it to include a time limit. If the parties reach an impasse, the cases would then be returned to litigation.
Attorney Charles Lovell, who represents 12 defendants, described the process as well-intentioned but said it is not working very well.
"We need to not have an open-ended process," he said.
McConnell set an Oct. 22 deadline for attorneys on both sides to submit recommendations for improving the process.
In her special master's report, Sherman called the mortgage crisis a "Gordian knot" and said that debt forgiveness needs to be part of the solution.