Foreclosures in the United States are at epidemic levels leading to mandatory mediation services in several states. Delaware is no exception to this situation. in fact, foreclosure rates have been at an all time high in that state for several years now with an astonishing 25,000 foreclosures since 2007. To curb this trend, the State Attorney General Beau Biden and several lawmakers mandated civil mediation in lieu of foreclosure proceedings.

How Foreclosure Mediation Can Turn the Tide

The central idea to mediations in foreclosure cases is to bring the lenders and borrowers into face-to-face negotiations to discuss available alternatives to foreclosure. The tone of the meetings is that it benefits everyone involved to keep families in their homes and any acceptable avenue that can maintain this arrangement is worth considering.

Such arrangements could include payment arrangements to reduce late payments, loan assistance and consolidation, among other potential avenues to alleviate the strain on the homeowner while not negating the rights of the lender.

How Mandatory Mediation Changes the Foreclosure Process

Of course, the fact of instituting mandatory mediation will greatly change the dynamic between the borrower and the lender. Obviously, the fact of them being mandatory is one change, but along with this, there are several other changes in the foreclosure process.

• -  There will no longer be an income qualification for borrowers.
• -  The lender will have to pay a filing fee to fund the mediation program.
• -  The time frame a homeowner has to respond to a foreclosure notice is extended to after the mediation conference. The entire foreclosure process is suspended once the mediation is scheduled. This supersedes the previous time frame a homeowner had to respond to the complaint, which was 20 days.

These enforced mediation services are a growing trend in the United States. Certainly, they place more bargaining power in the hands of homeowners. On the other hand, they also save lenders the trouble and monetary loss of maintaining empty houses. In the end, everyone wins.