A report by the State Foreclosure Prevention Working Group of the Conference of State Bank Supervisors indicated that about 80 percent of troubled borrowers were not availing of loan modification programs being offered through lenders to stem the tide of distressed properties on lists of bank foreclosures.
This prompted the state governments of Connecticut and New Jersey to launch programs that motivate troubled borrowers to save their properties from lists of bank foreclosures. Both programs require lenders to meet with court-appointed mediators and distressed homeowners. New York has a separate program to help borrowers of subprime loans.
Roberta Palmer, who handles the Foreclosure Mediation Program in Connecticut, said that so far, the program is working fairly well because it requires both parties involved to negotiate in the presence of court-appointed mediators who are knowledgeable about different programs available to help borrowers save their properties from foreclosures.
In New Jersey, about 614 troubled homeowners qualified for mortgage mediation in May. And out of the total 614, 223 were able to settle and save their homes from lists of bank foreclosures, according to Eric R. May, director at the New Jersey Department of the Public Advocate’s Office of Dispute Settlement.
Under the program, troubled borrowers in both states received foreclosure notices as well as letters sent by the judicial branch telling them that they may be eligible for free mediation. They are requested to call several toll-free numbers to ask how they may qualify. Both state programs apply only to distressed primary residences.
In New Jersey, borrowers who qualified for assistance are assigned counselors who have been approved by the U.S. Department of Housing and Urban Development. These housing counselors have been trained in helping homeowners in mediation programs. Housing counselors will be the one to evaluate and determine the amount of mortgage that borrowers could afford.
Meanwhile, in Connecticut, financial counselors will handle borrowers after lenders and mediators have met and discuss the case. The counselor will then send recommendations to lenders on how best to modify troubled loans or what other solutions could be adopted.
Industry experts said that Connecticut’s court program forces all parties involved to mediate on a specified date to save properties from lists of bank foreclosures.
Related Posts:
- Avoiding Foreclosure is not Impossible
- Effect of Mediation on Multi Family Foreclosure Listings Evaluated
- Indiana Program to Stem Growth of Foreclosure Lists
- Governors’ Mixed Reaction to Foreclosure Plan
- New Jersey Legislators Step Up Efforts to Protect Homeowners from Foreclosure
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