Here is an additional update on Foreclosure Mediation across the U.S. by Mediation News Editor Keith Seat.
Federal legislation has been introduced that would encourage state and local governments to create strong foreclosure mediation programs, among other things. The Preserving Homes and Communities Act of 2009, introduced by Senator Reed (D-R.I.), would authorize $80 million in federal matching funds for mandatory mediation programs. Press Release (October 1, 2009) (Subscription Required); S. 1731
The Mortgage Bankers Association asserts that mediation programs are actually delaying efforts to resolve problem loans, and that nationwide the industry has provided over 5.2 million workout plans to help delinquent borrowers since July 2007, with over 2 million loans in which lenders reduced interest rates, lengthened loan terms, reduced the amount owed or took other steps. Las Vegas Review Journal (October 14, 2009)
The National Consumer Law Center analyzed foreclosure mediation programs in fourteen states and concluded that the level of accountability is not sufficient for financial institutions to modify loans enough to make the programs effective. SFGate (September 24, 2009); National Consumer Law Center Report
The Nevada Supreme Court on September 28 passed new rules giving mediators the power to determine that lenders acted in “bad faith” in foreclosure mediations, which could block foreclosure and lead to additional court sanctions, causing concern among some over ambiguity.
Legal workshops are being held to teach homeowners how to get the most out of foreclosure mediation, so they can effectively represent themselves. Las Vegas Business Press (October 12, 2009); Las Vegas Now (October 22, 2009); Fox 5 news (September 17, 2009)
The Delaware Superior Court adopted a Residential Mortgage Foreclosure Mediation Program which takes effect September 15 and gives homeowners the ability to mediate prior to foreclosure. Sussex Countian (September 10, 2009); Delaware Online (September 14, 2009); Administrative Directive
New legislation in Indiana requires creditors to notify homeowners of their right to a settlement conference prior to foreclosure. The Indiana Supreme Court and numerous government and non-profit agencies have just completed a training program for over 1,000 judges, attorneys and mediators in how to handle foreclosure cases. RealEstateRama (October 19, 2009)
The Florida Supreme Court heard arguments on a task force report recommending mandatory mediation for residential foreclosures to help courthouses deal with the flood of cases. Over 290,000 foreclosures were filed in Florida in the first nine months of the year. A dissenter on the task force raised concerns about the financial burden on lenders, suggesting that borrowers should contribute to the cost of mediation when possible. Miami Daily Business Review (November 5, 2009) (Subscription Required)
Connecticut is mediating less than 40% of eligible foreclosure cases, even after making mediation mandatory in July, because the program only applies to homeowners who file an appearance in court, and a majority do not. When mediation does occur, 75% are settled, with homeowners staying in their homes in 62% of the cases and 13% moving without foreclosure. About 2,000 cases have been mediated in the last three months with a team of 24 full-time mediators. Connecticut Law Tribune (October 26, 2009) (Subscription Required); Foreclosure Mediation Program Frequently Asked Questions
Legislation pending in Ohio would mandate mediation for nearly every foreclosure case in the state. The legislation would require the court to establish filing fees to cover the cost of mediation, set qualifications for mediators and establish procedures. Daily Court Reporter; H.B. 306
New Jersey is discussing making foreclosure mediation mandatory for homeowners as outreach efforts have not been able to get more than five percent of homeowners to seek help. New Jersey Law Journal (September 28, 2009)
Keith L. Seat is a full-time mediator and arbitrator who can effectively assist parties in resolving a wide range of telecommunications, antitrust and other commercial disputes. With over twenty years of legal experience as a mediator, arbitrator, litigator, advocate before executive branch agencies, and key staffer in the legislative and judicial branches, Mr. Seat brings a wealth of experience to his work as a mediator and arbitrator to help parties reach successful resolutions of complex disputes.
Mr. Seat began his legal career in a federal clerkship with U.S. District Judge William H. Becker, and then litigated antitrust and commercial disputes for many years at a major Washington law firm, Howrey, Simon, Arnold & White, where he first worked on telecom and technology issues. In 1993, Mr. Seat was named General Counsel of the Antitrust, Business Rights and Competition Subcommittee of the U.S. Senate Judiciary Committee, where he served for four years, playing a significant role in the enactment of the Telecommunications Act of 1996. Returning to the private sector in 1997, Mr. Seat rounded out his experience with a senior in-house counsel position at MCI, one of the nation’s largest telecommunications firms. At MCI, he gained a first-hand appreciation for the important perspective brought to issues and disputes by in-house decision-makers. Mr. Seat also deepened his knowledge of telecom issues and gained experience addressing competition-related issues in the corporate setting, as well as helping resolve disputes among large organizations.