Arizona: AZ Law Help has developed a “Lawyers Helping Homeowners” program as an effort to help homeowners in working with lenders to avoid foreclosure. This program is sponsored by the State Bar of Arizona, the Arizona Foundation for Legal Services & Education, and the Arizona Supreme Court. Lawyers are encouraged to volunteer their time to assist with this program’s success
Connecticut: The Foreclosure Mediation Program was established pursuant to P.A. 08-176 on June 12, 2008. Beginning July 1, 2009 new legislation was enacted to make the voluntary mediation program mandatory. Homeowners facing mortgage foreclosure on primary residences must enter mediation with their lenders at no charge to them. The following links provide the legislation and a summary of the bill. The Connecticut program puts homeowners in direct contact with their lender to enable them to re-negotiate their mortgages by refinancing or restructuring their debt. To qualify, a mortgage foreclosure action must be filed against homeowners of a one-to-four family owner-occupied residential property located in the state of Connecticut. The property must be the primary residence of the homeowner. The following link provides the program structure including participation requirements and the required forms to initiate mediation.
Delaware: The Superior Court of the State of Delaware established a Residential Mortgage Foreclosure Mediation Program on August 31, 2009. Lenders are required to send notice of the program along with notices of foreclosure. Before participating in mediation, homeowners must meet with a HUD-approved housing counselor and develop a good faith proposal in which monthly mortgage payments would not make up more than 38% of their monthly income.
Florida: The Florida Supreme Court established a Task Force on Residential Mortgage Foreclosure Cases to develop recommendations for a statewide response to the large number of foreclosure cases facing courts throughout the state. The Task Force issued an interim reporton May 8 and a final report August 17, 2009. The report recommends that all foreclosure cases involving residential homestead property be referred to mediation conducted through a uniform statewide managed mediation program. Parties may appear at the mediation telephonically and borrowers will not pay a fee to participate.
Seminole County 18th Judicial Circuit issued an administrative order in February 2009 that all owner-occupied residential mortgage foreclosure actions be referred to mediation. The program mandates that counsel schedule the foreclosure case for mediation prior to scheduling the matter for a final or summary judgment hearing. In February 2009, the Brevard County 18th Judicial Circuit issued a similar administrative order. The 19th Judicial Circuit has also issued an administrative order that all newly-filed mortgage foreclosure actions be referred to a mediation program given by the Collins Center.
Indiana: The Indiana Supreme Court has established a Mortgage Foreclosure Task Force in collaboration with the Indiana Housing and Community Development Authority and legal service providers to educate trial court judges and train and recruit volunteer lawyers and mediators to help homeowners facing foreclosure. The Court has sponsored over 30 foreclosure training events throughout the state, reaching over 1,000 judges, lawyers, and mediators. These trained professionals will help homeowners and creditors explore, when appropriate and desired, alternatives to foreclosure in accordance with provisions of Senate Enrolled Act 492. These trainings have been co-sponsored by the Indiana Supreme Court, Indiana Pro Bono Commission, and the Indiana Commission for Continuing Legal Education. Chief Justice Shepard has promised the support of this new effort.
Iowa: In September 2007 a joint project between Iowa Mediation Services and the Attorney General’s Office established a mediation program enabling borrowers and lenders dealing with mortgage, refinancing, and foreclosure concerns to request meditation. This voluntary program includes a foreclosure hotline.
Maine: The State of Maine Courts established a Judicial Branch Commission Foreclosure Diversion on March 31, 2009. The Commissions has been asked to develop a foreclosure diversion process to provide appropriate information to self-represented parties regarding opportunities for free or low-cost legal assistance, credit counseling, and other services; provide for the early diversion of the parties in foreclosure cases to an alternative dispute resolution process that will foster reasonable loan workouts or other resolutions; identify new or revised statutes, rules, or orders needed to implement the Commission’s recommendations; and recommend an implementation timetable.
Massachusetts: A bill is currently pending in the Massachusetts legislature to establish a mandatory statewide mediation mortgage foreclosure program. Under the proposed legislation, courts would be required to inform borrowers about the program. When a borrower requests mediation, the lender is required to participate. Cases would be mediated by court employees who are trained in mediation and “relevant aspects of the law,” and are familiar with community resources and assistance programs in the state. The foreclosure process would be suspended during mediation, which would begin no more than 10 days after a borrower’s request and last no longer than 35 days.
Michigan: On November 6, 2008, Michigan enacted the Michigan Home Foreclosure Prevention Act. The Act authorizes the commissioner to review the lender-borrowers information to determine whether foreclosure can be avoided. If appropriate, the commissioner may either extend the filing date for a foreclosure for up to 90 days and/or require the lender and the borrower to participate in mediation if there is a potential to work out new terms.
Minnesota: On November 20, 2008, Minnesota proposed the adoption of a “Homeowner-Lender Mediation Act.” Governor Tim Pawlenty vetoed this legislation in May. Under the Act, before a lender forecloses on a property, the lender would have been required to provide the debtor notice of the right to mediation. The homeowner then had a period of time (two weeks) to request mediation.
Nevada: Assembly Bill 149 was passed by the Nevada Senate on May 22 and signed into law by the Governor. The bill mandates non-judicial mediation to occur before a home can be foreclosed on. The bill proposes that all lenders are required to seek mediation at the request of homeowners in an act to avoid foreclosure. The homeowner has 30 days to request mediation and the foreclosure proceedings will be cut in half in their frequency upon this request. Any mediation must be conducted by a certified judge or mediation professional. Once the mediation begins, no further foreclosure proceedings can occur until the mediation is complete.
New Hampshire: On June 29, 2009, New Hampshire adopted SB70 which authorizes the Judicial Branch’s Office of Mediation and Arbitration to provide pre-suit alternative dispute resolution services. The office is in the process of using this authorization to create a pre-suit mediation program for foreclosures cases.
New Jersey: On December 1, the New Jersey governor signed legislation allocating $60 million in state and federal funds to support foreclosure prevention programs. The foreclosure mediation program, which was established in October, requires mediation for all foreclosure cases contested by homeowners. The New Jersey foreclosure mediation program includes court referred mediation which is available to homeowners who have filed an answer and are contesting the foreclosure as well as to homeowners who fail to make a formal appearance and whose cases are uncontested. Foreclosure mediation may be requested up to the time of the sheriff’s sale. Where homeowners file answers, judges may order mediation as part of the case management conference. To encourage participation, the program includes a hotline and no fee is charged for mediation.
New Mexico The First Judicial District Court in Santa Fe, New Mexico, has established a foreclosure mediation option as part of its Alternative Dispute Resolution Program. To date, this is the only court-connected foreclosure mediation program in the state. When they serve the complaint and summons, plaintiffs are required to provide a notice to defendant homeowners that provides information about where they can get help. Either party can request a referral to foreclosure mediation. Referral orders require mediation sessions to be scheduled within 60 days of entry of the order. Parties are required to exchange extensive information prior to the mediation session. Plaintiff is required to designate a representative with settlement authority to attend the session either in person or telephonically. Defendant homeowner is required to meet with a HUD-approved housing counselor prior to session. Mediators are attorneys on the Court’s ADR settlement facilitator list who have foreclosure experience or training. Mediators are paid $500 for a four-hour session; parties pay equal shares, but parties who can’t afford it may request free or reduced-cost mediation. Forms are available on the Court’s website, www.firstdistrictcourt.com. Questions and comments may be addressed to Celia A. Ludi, Esq., Court Constituent Services Director, sfedcal@nmcourts.gov, or 505.827.5072.
New York: The Residential Mortgage Foreclosure Program – enacted in June 2008 – encourages lender-borrower negotiations prior to the filing of a foreclosure action. The program helps lender-borrowers to conduct court conferences as early as possible in the case to explore the possibility of a workout or settlement, and failing that, to arrive at a case management plan that helps avoid unnecessary delays. The homeowner is encouraged to access legal and financial counseling service providers before the early court intervention conference.
In addition, A08236 is currently pending in the New York Assembly. The bill would mandate a that settlement conference is held by the court within 90 days after the date when proof of service is filed with the county clerk and that mortgagees are provided with notice of the availability of foreclosure prevention counseling.
Ohio: The Supreme Court of Ohio Dispute Resolution Section has developed a very comprehensive website providing the documents needed to develop and administer mediation foreclose programs. Ohio began their foreclosure program in December of 2007 and currently reports that all 88 counties offer mediation as an option in foreclosure cases. The Court has developed an excellent mediation foreclosure page for consumers entitled “What You Need to Know” that provides questions, answers and resources for individuals facing foreclosure as well as ways for mediators to become involved. They have further developed an 11-Step Foreclosure Mediation Program Model- including sample court mediation order forms – that is designed for courts to implement and modify based on their local needs, resources and community. The Supreme Court of Ohio Dispute Resolution Section has also organized a multi-state group for individuals interested in building programs in their geographic area. To join this group please contact Jacqueline C. Hagerott at hagerotj@sconet.state.oh.us.
In addition, Ohio has developed a Loan Modification Escalation Process – including the request form – to assist housing counseling agencies and legal aid representatives in their negotiations with services. Another excellent resource is the Cincinnati Home Preservation Initiative, which includes in-depth information on loan work-out options. The Ohio Housing Finance Agency works with lenders and other organizations to help find affordable housing for Ohio residents. The Supreme Court of Ohio released a legislative update on February 23, 2009 that provides the most recent information about foreclosure laws in Ohio.
Pennsylvania: On November 12, 2008 the Court of Common Pleas of Philadelphia County adopted a Residential Mortgage Foreclosure Diversion Pilot Program. The program is designed to provide early Court intervention in residential owner occupied mortgage foreclosure cases. Owner occupied residential properties which are subject to execution to enforce a residential mortgage cannot proceed to a Sheriff Sale unless a conciliation conference – discussing options such as a loan work-out and other solutions – is held.
Rhode Island: On August 7, 2009 Mayor David N. Cicilline of Providence singed two new ordinances assist homeowners at risk of foreclosure. The first ordinance protects renters from eviction if they are at risk of foreclosure. The second ordinance requires mediation between the homeowner and the lender before completing foreclosure.
Wisconsin: Marquette University Law School has received $310,000 to start a foreclosure mediation program that will mediate between lenders and residential borrowers facing foreclosure in Milwaukee. Beginning May 28, an informational phone line will be operational for those interested in learning more about the program. Interested parties may call 414-288-4040. Mediation services will be as of July 1 2009. Senator Lena C. Taylor has proposed the Mortgage Mediation Act. The Act would require the lender to give the debtor notice of the right to mediation and defer the foreclosure process for at least 90 days after the homeowner requested mediation. Parties would be required to negotiate in good faith and could agree to diverse remedies, including adjusting the interest rate or the principal, extending the repayment period, or modifying the loan terms. If a lender failed to act in good faith, the homeowner could request court-supervised mediation. In addition, the city of Milwaukee created the Milwaukee Foreclosure Public Initiative. The initiative has recommended that Milwaukee create a court-appointed mediation program to divert foreclosures into loan modifications.
