Foreclosure Mediation

This is a program provided by many court systems. The homeowner who is considering foreclosure on their home can find a solution that is mutually beneficial to the homeowner and the mortgage company. To qualify for foreclosure there are different requirements depending on the jurisdiction. Most people are eligible because it is in the best interest of the mortgage company and the homeowner to settle rather than foreclose. Going through this program does not guarantee that the foreclosure will not go forward. It is up to both parties involved to craft the agreement that works for both of them.

An independent third party presides over the enforcement mediation. This independent party is called a mediator who will meet with the mortgage company representative and the homeowner. Your role in this procedure is to structure the discussion so that it leads to a production solution. They can also take a proactive role in suggesting solutions that will benefit the owner and representative. The mediator will often meet privately with the owner and representative to highlight the weaknesses and strengths of their bargaining position.

While there is no guarantee that the foreclosure will be delayed, canceled or stayed, it does give both parties the chance of a good outcome. One result is a restructuring of the payments to ease the financial burden on the homeowner along with the payment of any past due debt owed on the mortgage. There is also a drastic possibility is leniency. This is a temporary suspension of payments until some event occurs in which the owner can better meet the owner’s financial obligation. The forbearance allows for a late payment, but the interest on the mortgage will continue to accrue.

When the homeowner goes to foreclosure mediation, it is important that they can demonstrate their ability to pay if offered a proposed solution. If the homeowner is seeking forbearance, they will have to show the lender the probability of some event that will cause them to resume mortgage payments at some point in the near future. If the owner requests a restructuring of the payments, he will have to show what is different about the restructuring that will allow him to make the payments when he was unable to make the regular mortgage payments. One difference could be that the restructured payments are not as much as the regular mortgage payments.

The best thing for the owner is to request a foreclosure mediation and comply with the agreement so as not to lose their house. For the mortgage company they would not have to worry about selling a foreclosed home.