A new mediation program was created by Broward County, Florida in order to help residents resolve disputes without going to court. The goal is to provide a space for both homeowners and their lenders to talk to each other directly, with the help of a mediator. The goal is to find a solution that works for both parties.
The new foreclosure mediation program is the result of a study that was conducted by the Florida Supreme Court. The study found that many homeowners were struggling to keep up with their mortgage payments and were at risk of foreclosure. The mediation program is designed to help homeowners work out a payment plan with their lender and avoid foreclosure. This study was done to see how to reduce the amount of foreclosures in Florida and to try and come up with ways to end the foreclosure crisis.
The head judge of Broward County started the program. The goal of mediation is for the mortgage lender and the homeowner to meet with a neutral third party to discuss their options and work out a loan modification or other solution, along with a payment schedule that will ensure long-term success.
How does the Broward County Foreclosure Mediation Program work?
The information is as follows: The mediation program will be conducted like this. If a foreclosure case is filed by the lender, the case will be assigned to a housing counselor or a case manager from the company handling the mediation program. That non-profit company is a member of the American Arbitration Association. The homeowner will be notified and, if the borrower agrees to a free mediation session, the homeowner will need to undergo a credit counseling session. The bank and the homeowner will work together to try to find a solution to the problem, which might involve reducing the interest rate, changing the loan, or reducing the amount of money owed on the loan. If there is no way to fix the situation, the homeowner may have to give up the house. There is no guarantee that each case will be resolved.
The medication process will also help the family to stay in the home longer, as the process from start to finish is expected to take 4 months. The cost of the foreclosure mediation sessions will be paid directly by the bank that files the foreclosure action and there is no cost to the borrower.
Is the program successful?
The data shows that it can be very helpful, but the results will vary. The Senior Vice President of American Arbitration Association reported that approximately 50-60% of lenders and homeowners were successful in communicating and working out a solution to foreclosure when they met together. A formal mediation program can help resolve disputes more effectively and efficiently.
Local housing counselors and foreclosure defense attorneys in Broward County believe that the mediation program will help homeowners who are facing foreclosure, but much of that depends on the banks and lenders.
Many believe that mediation between homeowners and lenders is beneficial because lenders are more likely to make changes like reducing the interest rate, changing the principal, and addressing large past due balances. If you are in danger of losing your home through foreclosure, you should be contacted by the American Arbitration Association. Please call 1800-218-5524 or ask your lender about the mediation program if you have any questions.