Foreclosure Epidemic Stemmed Using Court-Ordered Mediation
By Phillip Williams on May 31, 2010, 10:42 am Posted in Finance NewsThe Mortgage Bankers Association reported last month that a record number middle and working class people are facing foreclosure. They are estimating that at least 10% of all home loans are behind by at least 60 days. In two states hit the hardest by the recent recession, Florida and Nevada, the rate went as high as 20%. Even with the fact that foreclosure starts were reduced by 5% in the last year, the number of late individuals increased by 40%.
Programs That Are Designed To Help
Court-ordered mediation could be the last bastion for those facing foreclosure. Most of the programs targeting the foreclosures have been slowing the crisis only marginally. In response to this the Home Affordable Modification Program from Obama claims to have helped over 300,000 and says that more than 3 million are eligible. Also HOPE NOW, an alliance of private lenders, claims to have helped 2.9 million since their inception. There are other programs available reporting varied success rates.
Where The Problem Lies–And A Solution
Sean DeVries, an Orlando-based loan workout specialist, says that the major obstacle to getting a loan modification generally sits in the lap of the lenders. He says that “There is no established path to get a good, sustainable modification,” then he gave no less than 9 fax numbers for one mortgage company. Many lenders are difficult to get to the negotiating table, claiming that they have a binding contractual obligation.
Senator Bill Nelson has introduced legislation that would require any company receiving Federal insurance money to go into mediation before foreclosure. Many states have already passed similar rules while others are looking into passing this type of legislation. The biggest problem so far with this has been the varied requirements of each individual state, some only requiring a check mark in a box and others needing remediation of the losses incurred in a modification versus a foreclosure.
Related posts:
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- Record Numbers Of Foreclosures In April Analysts Show
- Should I Declare Bankruptcy If I Own A Home?
- Are Refinancing Mortgage Loan Debt Consolidation Two Different Things?
- How To Renegotiate Mortgages
2 Responses to “Foreclosure Epidemic Stemmed Using Court-Ordered Mediation”
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Mediation is not working. It is only putting off the inevitable and choking the court dockets with foreclosures that are on hold. The last thing Florida needs is more foreclosures tied up in court. The courts are so backlogged now that the process takes 2 – 3 times as long as it used to.
In my opinion, mediation is working in Florida; the last thing that Florida needs is to give the bankers what they want – another non-judicial foreclosure state. We have all witnessed how the bankers’ irresponsible behavior and greed has gotten us to where we are currently with the housing and financial issues.