If you live in Ohio, there's some hope that you can negotiate your way out of foreclosure with a Court-annexed foreclosure mediation program. See Foreclosure filings rise in five counties at the the Crescent News. Excerpt below.
UPDATE: Connecticut also has a foreclosure mediation program: See
Success For Mortgage Mediation in Connecticut?
Effective July 1, 2008, Connecticut established a mediation program for foreclosures. Statistics available for the latest period ending November 30 2008 reveal some interesting detail. Mediators are working diligently to rescue residential homes from the auctioneer. However, the program is missing important components.
In the period of July 1st to November 30th, there were 9,917 foreclosures filed in the state, an average of 450 cases per week. In that period, mediators successfully negotiated 519 cases so that homeowners got to remain in their homes. This is just slightly over 5% of all cases filed. Only 380 cases or 3.83% resulted in a modification of the mortgage terms. Despite the hard work of Connecticut’s mediators, the state’s residents are not being protected from foreclosure.
UPDATE: Thanks to the ABA Dispute Resolution Magazine for informing us that Minnesota now also has a foreclosure mediation program. See Minnesota Law Offers Foreclosure Mediation to Homeowners at the Foreclosure Listings blog here.
UPDATE: Foreclosure Mediation Programs Commenced Under Local Ordinance in Providence, Rhode Island: Providence Foreclosure Ordinance Aims to Protect Renters (excerpt below):
PROVIDENCE, R.I. (WPRI) - In an effort to protect families from foreclosure, Providence Mayor David Cicilline unveiled two ordinances Monday morning during a news conference in the city's Olneyville neighborhood.
The first proposal, Tenants Protection Against Foreclosures Ordinance , is meant to protect renters from eviction when their apartments are subject to foreclosure proceedings.
A proposed state law, that would have provided similar requirements, failed in the General Assembly last year. Rhode Island Housing Executive Director Richard Godfrey applauded Providence for stepping in to provide that protection.
The second proposal, Foreclosure Mediation Ordinance , would require financial institutions and property owners to engage in mediation with a HUD-approved counselor before moving ahead with a foreclosure.
"We have a court adjunct mediation program," said Schmenk. "The worst thing people can do is do nothing. The best thing is to get an answer filed on their behalf and open up a discussion with the mortgage holder to avoid it going to the foreclosure sale. Often times they can get something worked out with the lending institution short of losing their home."
When a foreclosed home goes up for auction bids start at two-thirds of the property's appraised value.
"Most time the lenders are holding significantly more than that in debt," said Schmenk. "We've noticed in a number of cases things get worked out and they are able to enter into some kind of accommodation that works for lender and mortgage borrower."
Schmenk encourages individuals facing foreclosure to take part in mediation programs.
There was a mediation just last week in Defiance County, said Cheryl Timbrook of the common pleas court. Overall, she said that they haven't had many requests for mediation so far.
Sonnenberg said Henry County has had a mediation program available for foreclosure for a year. She said there has been an increase in requests for mediation since the court started sending out information about the program as well as how to file an answer to the foreclosure summons received by defendants.
"I don't think many people knew about it before," she said.
Chris DelFavero, mediation coordinator for the state's Northwest Ohio Court Mediation Services, said he's seen an increase in individuals asking for foreclosure mediation. Northwest Ohio Court Mediation Services covers Henry, Defiance, Fulton, Paulding, Williams and Putnam counties. The program started last spring.
"With the help of the (Ohio) Supreme Court we established a process for referrals through the (county) clerk's offices," said DelFavero, who added that referrals started to pick up this summer. "Last month I had the most referrals since we started. I had 11 referred this past month. We started with just two or three a month, and now we have two a week."
DelFavero said that many cases involve jumps in interest rates, causing payments to increase or individuals who have seen a decrease in pay.
"Those are the cases we hopefully can resolve and come up with a repayment plan or refinance their rates," he said. "The general problem in the industry was the subprime rates. Some of it is the economy, with people losing their overtime. Sometimes loans are given based on people making $40,000 and then they lose their overtime so now they are making $30,000. They are working, but may have fallen four to five months behind. The lender usually will work with them."