Foreclosure Mediation Programs Are Not Helping Homeowners Stop Foreclosure – according to a recent report

According to the National Consumer Law Center (NCLC) state foreclosure mediation programs are not showing evidence of helping or facilitating loan modifications for homeowners to stop foreclosure.  The NCLC has reviewed 25 foreclosure mediation programs in 14 states and reported that the programs are failing to be effective with foreclosing lenders or imposing any obligations on mortgage servicers. “Without the imposition of these obligations, it is unlikely that mediations will lead to fewer foreclosures,” the report said.

The lack of mandatory rules and the failure of imposing sanction for non-compliance on the bank’s part has led to the failure of these foreclosure mediation programs.  Procedural flaws has also been noted including the lack of mandatory analysis of loan modification alternatives.

 The report entitled, “State and Local Foreclosure Media Programs: Can They Save Homes?” reviewed the California foreclosure mediation programs  as well as in 13 other states.  The NCLC staff attorney Geoffrey Walsh warned that the foreclosure mediation programs may never be effective to stop foreclosure and make homes more affordable if corrective measures are not taken. “If the programs continue to demand little or no accountability from servicers, they will likely go the way of federal efforts to control foreclosures that have failed as a result of relying on voluntary compliance by the lending industry,” said Walsh.

Tagged as: Accountability, California Foreclosure, Consumer Law Center, Corrective Measures, Failure, Federal Efforts, Foreclosure Homes, Foreclosures, Imposition, Lenders, Loan Modification, Mandatory Rules, Mediation Programs, Mortgage Servicers, National Consumer Law Center, Nclc, Sanction, Staff Attorney, Voluntary Compliance