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If the borrower was recently modified and
defaulted shortly thereafter they may not be in a
position to stay in the home. Prior modifications
may limit the borrower's options going forward.
Making contact with the borrower before the
initial mediation session may assist in getting a
full history of contact with the borrower. Having
the full picture of the loan's history and the
borrower's desires will lead to quicker resolution
or proceeding with the foreclosure.
Non-Home Retention Options
In cases where the borrowers expresses the
desire to proceed with a friendly foreclosure,
there should not be an issue with terminating
the mediation and working with the borrower
outside of the mediation program. Some
borrowers may be reluctant to terminate
mediation or to forgo a loan modification
review. Sending the borrower a settlement
offer outlining non-home retention offers
may be helpful in avoiding unproductive and
unnecessary mediation sessions. Reminding the
borrower of these options early in the process can
lead to a speedy resolution of the matter.
Working Outside of Mediation and Requesting
Termination
Mediators are wary of offering to work with
borrowers outside of mediation. While the
offer may be genuine, the mediator may see
this as a strategy to circumvent the process. It
is important to be mindful of the appropriate
time to make the offer or request termination.
After planting the seed and exhibiting your
desire to participate, don't undermine that
goodwill and credibility. Request termination
at the appropriate times and in the proper
manner.
While foreclosure mediation programs, can
lead to successful outcomes for both parties
they often lead to unnecessary delays in cases
where modification is not a viable option.
By following mediation best practices, those
delays and the number of continued mediation
sessions can be greatly reduced or eliminated.
