Investigating the Issues That Affect You Most

Move Toward Mediation Could Save Scores of Homes

Judges say many homeowners entering foreclosure never talk to their lenders

By Lisa Parker
|  Thursday, Mar 18, 2010  |  Updated 2:30 PM CDT
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Housing Crisis: Mediation Can Make a Difference

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Judges say many homeowners entering foreclosure never talk to their lenders.

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Housing Crisis: Mediation Can Make a Difference

There's a simple step most homeowners don't take that could save their homes.
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A number of jurisdictions, including Cook County, may soon launch a foreclosure prevention strategy that involves mediation.

Housing advocates say that just getting a homeowner and their mortgage lender or servicer to sit down and talk can produce excellent results, but it's a step that many homeowners never initiate.

Judges nationwide report that homeowners routinely ignore court proceedings related to the foreclosure of their properties, mostly to the detriment of their case.

"Historically, a fairly small percentage of homeowners ever bother to go to court and talk to a judge and explain the situation," said Michael Van Zalingen of Neighborhood Services of Chicago. "Most people just ignore the foreclosure entirely and do nothing. I think they ignore it, because they don’t realize there are things they can do,"

Such was the case of Southsider Toni Richards. She said she was once on the path toward foreclosure, but decided to pick up the phone instead of ignoring the pending problems. One call to a legal counseling agency put her in touch with Action Now. She says the housing advocates made all the difference in helping her show up in court, and ultimately, in saving her home.

"I found out that people that are in foreclosure, the lenders, they don’t really want to talk to you, unless you have someone to support you," Richards told NBC Chicago. "I found out that if you talk to the judge and really explain your hardship, sometimes they may be able to work with you if you have the income and some means to get a loan modification."

Mediation worked for her. She said the lender decided to cancel the foreclosure, stop a pending eviction order, and modified her loan.

A number of states already use mediation, and several more have pending legislation that would provide the funding needed to bring foreclosure mediation to their constituents.

Advocates say mediation is most effective when it is made mandatory, like in the city of Philadelphia.

Organizers of the mediation program for Cook County say they are very close to setting a start date for the new initiative and expect to make that announcement in the coming weeks.

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National Consumer Law Center:  State and Local Foreclosure Mediation Programs  (.pdf)

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