A New Jersey-run foreclosure mediation program has helped a great number of distressed homeowners avoid title=”Foreclosure Listing”>foreclosure listing. The Mortgage Foreclosure Mediation Program started in Middlesex County in 2008 and was adopted statewide early this year.
As of end of June, the state-run mediation program has resolved 52 percent of filed cases and saved 281 houses from foreclosures.
According to industry experts, the program allows government certified housing counselors and lawyers to help distressed homeowners avoid foreclosures.
The program’s website and hotline has allowed about 2,028 homeowners connect with a network of financial advisers, mediators and legal service providers who are willing to help them for free.
Officials involved in the program explained that cases filed under the iniative may take some time to process because homeowners are required to submit all necessary financial documents.
They said that cases involving housing counselors have a high success rate because lenders require financial data to help them make a decision on whether to grant a loan modification or not.
Industry experts said that nonprofit organizations and state agencies that run the mediation program maintain that there are always positive solutions for every homeowner who joins the initiative.
They added that housing counselors are always on the side of homeowners and they can help a lot in working out mortgage arrangements that would be beneficial to troubled homeowners.
Furthermore, experts said that mediators are neutral and act as the go-between for homeowners and lenders in cases that an agreement is needed. They believed that without a mediator or housing counselor to help them, more homeowners would go into foreclosure.
The program helps homeowners with troubled loans receive loan modification to reduce their monthly payments into affordable rates. Additionally, charges such as late fees are forgiven to prevent lenders from acquiring the property.
In cases that mediators could not help homeowners save their properties from foreclosures, they will convince them to sell their properties for less than the value of their mortgages in order to preserve their credit.
Officials said that the mediation program is available to all homeowners regardless of their income. They claim that no other states offer a comprehensive mediation program that can handle a large amount of foreclosure cases.
In Connecticut, a similar program is being implemented that does not require borrowers to undergo financial counseling. In New York, a similar program is being offered only to borrowers of subprime loans.
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