Now We’re Talking: A Look at Current State-Based Foreclosure Mediation Programs and How to Bring Them to Scale
The Center for American Progress recently released a report, "Now We’re Talking: A Look at Current State-Based Foreclosure Mediation Programs and How to Bring Them to Scale," that surveys foreclosure mediation programs across the country and enumerates best practices. From their executive summary:
Based on our in-depth analysis of existing foreclosure mediation programs and their successes (and failures) at bringing homeowners and their mortgage servicers together to settle claims without resorting to losing/taking the property in foreclosure, we find that the optimal programs are those in which the first mediation session is automatically scheduled by the state once the mortgage servicer initiates the foreclosure process. We recommend that automatic mediation programs should be available wherever a borrower lives in a state, and, to that end, local pilot programs in some states should be expanded statewide. Specifically, we recommend that:
- States with so-called opt-in mediation programs, which require the homeowner to ask for mediation services, should evolve to automatically scheduled mediation, which is often called mandatory mediation. This step would promote greater participation while resulting in the same high percentage of win-win settlements for homeowners and mortgage servicers.
- States with mature pilot programs in selected jurisdictions now have foreclosure mediation as a proven solution to minimize foreclosures and should formalize them statewide.
- In states with pending legislation that would implement robust mediation programs, we recommend swift passage of the legislation.
- States with no mediation program and no plans for one should work through the state legislature and/or judiciary to put one in place.