Mortgage Foreclosure Mediation Program
DELAWARE SUPERIOR COURT ENACTS NEW
MORTGAGE FORECLOSURE MEDIATION PROGRAM
The number of mortgage foreclosures in Delaware continues to rise and the State has determined that action must be taken. The State of Delaware has responded to the housing crisis by offering a Mortgage Mediation Program in which homeowners and mortgage lenders must participate before any foreclosure is finalized. The Mortgage Mediation Program will allow homeowners and lenders to attempt a more reasonable resolution before a home is lost to foreclosure. The hope is that many more homeowners will be able to get past a foreclosure and keep their home, possibly with a loan modification.
The Mortgage Mediation Program applies only to mortgages of a primary residence with 4 or less units. The Mortgage Mediation Program is available to all homeowners who have had mortgage foreclosure actions filed on or after September 15, 2009.
Homeowners will now have 2 options when faced with a foreclosure. They can attempt to present their case to the Court as to why the foreclosure should not be ordered, or they can elect to enter the Mortgage Mediation Program. The latter now gives homeowners a far better option than simply going to Court and fighting with the lender.
Once a foreclosure action has begun the mortgage company must post and send a special Notice to the homeowner. This Notice must provide a hotline number to access a housing counselor, an intake form to assess your income versus expenses, and a checklist of documents needed to prove income and expenses.
Homeowners have 15 days from the date of the Notice to elect to enter the Mediation Program. The homeowner must first seek counseling. The second step is for the housing counselor and homeowner to submit the required forms and prepare a good faith proposal to pay monthly payments based on income and expenses. The case will then be scheduled for mediation. If a settlement is reached, the case is closed, however any violation of the settlement could result in the foreclosure action being re-opened. If no settlement is reached, the foreclosure will proceed as normal.
It is important to understand that if the homeowner fails to respond or do not enter the Mortgage Mediation Program within 15 days the lender can attempt to get a default judgment. This means that the Court can finalize the foreclosure even in the absence of the homeowner. If the homeowner elects to enter the Mortgage Mediation Program the lender cannot file for a judgment immediately. They must wait 60 days after the homeowner chooses to mediate. If the homeowner does not cooperate or delays the mediation beyond 60 days, the lender can request a default judgment at that time.
The Mortgage Mediation Program presents a valuable alternative to foreclosures. Homeowners no longer must sit back idly while their homes are taken from them.
You have 15 days to act, or you may lose important rights. If you are facing foreclosure, contact an attorney immediately to preserve your rights and options.
