More banks, lenders, borrowers and others are turning to the process of mediation in foreclosure cases.  These cases often involve significant assets, likely the most expensive asset one of the parties owned.  The stakes are often high and both parties may be incentivized to avoid the lengthy and expensive foreclosure process.

Every mediation is unique because different parties and interests are involved.  However, they may follow a similar process.  Many mediation sessions begin with a join session in which all of the parties, their attorneys and other interested persons are present.  The mediator begins by explaining the rules of mediation and the process.  Each side of the issue has their turn to discuss their position.  The parties may speak directly to each other at this process.

From there, mediation may proceed in a joint session or the parties may break into private caucuses.  During these private caucuses, the parties share information with the mediator who then funnels information back and forth between the parties.  The mediator may provide additional information about the process of foreclosure and the disadvantages of not reaching an early intervention in the case.  He or she also communicates offers and counteroffers between the parties.

During the private caucuses, the mediator also tries to identify the interests of the parties so that he or she can propose possible solutions that will satisfy both sets of interests.  For example, the borrower may accept that he or she can no longer afford the property but may want to delay a moving date.  The lender may want to avoid having to go to court.  The mediator can propose solutions to the parties as well as ask them to generate ideas during a joint brainstorming session.

If the parties reach an agreement, they usually enter into a separate binding agreement.