One of the strengths of mediation is that there isn’t a one size fits all solution to the foreclosure crisis in America today. Many commentators have suggested that all foreclosure mediation programs should deliver for vigorous outreach to borrowers. This could result in much higher rates of participation than in programs with limited outreach. Also, many lawyers believe that mediation programs should be opt-out rather than opt-in. However, if this shift occurred in every program, some areas with a huge foreclosure caseload would find it impossible to create a mediation program that could service all those cases. Opt-out programs work in smaller states with more capacity, but opt-out is not a design element that fits every foreclosure mediation program.
Mediation has had success in other contexts such as issues like family law and small claims and it was selected as a process to help deal with the aftermath of the foreclosure crisis because of this. Mediation allows all parties to a dispute to focus on the problem at the same time. Within the realm of foreclosure proceedings, communication with mediation focuses multiple parties at a single time to look at a case and discuss solutions to the problem. Mediators can talk about individualized solutions, and work towards taking resolving the problem.
Second, mediation can be a forum to discuss each case privately; so creative solutions may be produced. In the foreclosure context, servicers are very nervous about any precedent that would bind them to reducing principal on every loan. However, in mediation, the servicer may be induced by the confidentiality to offer a reduction in some cases. Moreover, confidentiality helps the borrower deal with questions and emotions they may be detrimental to positive public relations.
Third, mediation is a procedure that imparts parties a chance to speak their minds and helps parties to make decisions about their lives. Mediation can be an appropriate forum for foreclosure disputes, even if the parties don’t reach an agreement. Not every borrower/homeowner is going to be able to litigate extensively because of both time and cost.
Especially in a case area that overburdens the court system, such that few judges have the time to offer a listening ear, mediation may be a very appropriate forum for foreclosure disputes. Parties report feeling more satisfied with that process than a court process, even if they do not reach an agreement. This is quite important in the foreclosure context, as not every borrower will qualify for a foreclosure alternative. Mediation can be a place where borrowers feel an improved awareness of justice, despite the hypothetical situation of no settlement.
One misplaced idea that is that mediation can fix major problems in the external foreclosure crisis. Mediation programs, and mediators in them, cannot remedy problems outside to the process. Mediation can serve as a location for document exchange and review. However, mediators should not be the ones to review documents for accuracy and completeness, as this changes the mediator into a role that jeopardizes neutrality. If a program does require a check on documents exchanged, the program should provide to do so outside mediation.
If you are facing foreclosure and are interested in learning more about mediation, contact a Connecticut foreclosure defense attorney like me to understand your legal rights and options.