Foreclosure Mediation Programs
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What Are Foreclosure Mediation Programs?
Foreclosure mediation programs are offered by state governments to help homeowners avoid losing their property to foreclosure. However, not all states have foreclosure mediation programs. A foreclosure mediation consists of a meeting between:
- An impartial mediator,
- The lender, and
- The borrower(s).
What Starts the Mediation Process?
The actual foreclosure mediation process depends on the state where the property is located. Generally, though, the foreclosure mediation process starts when the lender begins the foreclosure process. The lender sends the borrower a notice of foreclosure, as well as:
- A foreclosure mediation notice,
- Details on how to opt-out of the foreclosure mediation program if enrollment is automatic, and
- Information about the state’s low-cost legal services and housing counselors approved by the U.S. Department of Housing and Urban Development (HUD).
Do I Have to Pay for the Mediation?
It depends. Some states pay for their mediation program, while other states require the lender to pay an additional fee when filing a foreclosure lawsuit. If the state requires a homeowner pay a fee, the cost is usually free or at a reduced rate for those who cannot afford the full fee.
What Documents Do I Need to Participate in Foreclosure Mediation?
The amount of documentation needed depends on the state where the foreclosure mediation occurs. For instance, Nevada has stringent requirements about the required documents.
A borrower and lender must provide the mediator with all documents pertaining to the mortgage, property, and arrearage. The lender and the borrower are also required to exchange documents prior to the meeting. The borrower must provide:
- Their current financial information
- A proposal on how to avoid foreclosure
The lender must give:
- The most recent property appraisal
- A short sale value estimate
- Current value of the property
- A non-binding proposal to avoid foreclosure
What Is the Difference between Contacting the Lender and Mediation?
Many borrowers find working directly with lenders to be difficult. This is because borrowers do not always feel that the lender’s representatives are responsive to helping them avoid foreclosure.
Should I Hire a Foreclosure Lawyer?
Participating in foreclosure mediation programs is one option to save your home. However, it may not prevent foreclosure. If you are fighting foreclosure, you should talk to a real estate attorney. You may discover options to stop foreclosure and keep your property.
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Last Modified: 03-31-2015 04:11 PM PDT
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