Are fees involved and who pays?
Unless required otherwise by a court, usually the bank and the homeowner will split the cost of the mediator equally. Mediators charge between $175 and $350 per hour, and usually require a two hour minimum in residential foreclosure cases.
What kind of outcome can be achieved?
Homeowners who enter mediations with legal representation have seen much higher success rates than those that go without. There are a number of possible solutions that you and your lender can explore. The solution will depend upon your income and expenses, what type of loan you have, the amount you owe in arrearage, and other factors that will be discussed. Each lender has a different loss mitigation program. The following are some possible solutions:
Loan Modification, Principal Reduction, Reinstatement Plan, Repayment Plan, Forbearance Plan, Extension Agreement, Deed in Lieu of Foreclosure, Short Payoff or Short Sale.
What are the rights and responsibilities of homeowners in a mediation?
Homeowners have the right to be represented by an attorney or other designated individual in mediation at their own expense. Homeowners are required to cooperate with their county guidelines. Homeowners must meet with an approved foreclosure counselor prior to the mediation. This counseling can be achieved via the telephone.
Homeowners DO NOT have to agree to any settlement proposal, and nor does the bank have to offer a loan modification to the Homeowner. Cases that do not reach an agreement in mediation will be sent back to court. The bank is only required to review the loan application for loan modification or other loss mitigation options. The bank is NOT required to offer a loan modification at the mediation.
Who are the mediators?
Mediators participating in the foreclosure mediation program are trained in mediating residential mortgage foreclosure matters and are neutral and impartial.
Will the mediator render a decision on my case?
The mediator does not decide who wins or loses or who is wrong or right. Their role is to help facilitate a settlement among the parties. They have no authority to impose a settlement.
Do I need a lawyer in order to participate in mediation?
No, you do not have to be represented by an attorney in order to participate. However, an attorney present at mediation and other negotiations is very valuable since the mediation process frequently involves disputes about the legal rights of the parties.
Who attends the mediation session?
The lender’s attorney, the lender’s decision-maker (usually will appear by phone), the homeowner and the homeowner’s attorney of record, should attend the mediation session.
At the mediation, do I have to testify or say anything?
If you are represented by an attorney at the mediation, you don’t have to say anything to the mediator at all. Your attorney will make a presentation after the short presentation by the bank’s attorney. You are present at the mediation to approve or disapprove of a settlement, and sign the settlement agreement, if one is reached.
What happens if we are unable to settle in mediation?
If the parties cannot come to an agreement at the mediation, the case may return to the court so that the foreclosure lawsuit can continue.
How much time will the entire mediation process take?
This depends on the county where mediation takes place, usually between 60-120 days from the day the mediation is
requested to the time it actually takes place and an outcome is identified.
Where will the mediation take place?
Mediation sessions will be held at suitable location(s). The parties will be notified of the date, time and location of the mediation with ample time to prepare.
Conciliation Conferences
In order to bring down costs for homeowners and banks, parties to foreclosure cases are now participating in conciliation conferences. Conciliation is a non-mandatory phone conference between the attorneys of the lenders and borrowers, held in order to reach a settlement. It does not use an independent mediator, has no additional costs, and does not require the borrowers to go to financial counseling. Best of all, conciliations are much more flexible with a homeowner’s’ financial situation and gives Foreclosure Defense Attorneys more opportunities to create a better settlement. Unlike mediation, homeowners are not required to come to the meeting and is handled entirely by our professional negotiators. These types of negotiations are not accepted by all mortgage lenders and require a greater amount of research into the client’s financial documents by the defense attorney. However, concilations are much quicker and easier to schedule and can be effective solutions to staying out of foreclosure.