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54 Legal Industry Update National Focus PLANTING THE SEED AND WORKING TOGETHER: MEDIATION BEST PRACTICES By: Kathryn A. Bodanza, Kluever & Platt, LLC Counties throughout the country have instituted mandatory mediation programs to borrowers interested in saving their homes. ese programs function to provide borrowers an opportunity to submit the necessary and complete documentation to their lender in order to obtain a loan modification. e programs facilitate the exchange of documentation between the parties. While the objective of these programs is to bring the parties together to find an option for the borrower, whether the option is is to stay in the home or to obtain a graceful exit, not all cases are appropriate for mediation. Some cases stay in mediation far too long. Mediation programs can lead to increased delays and delinquencies in cases. Especially in cases where there is no possibility of modifying the terms of the loan, or where the borrower does not desire to stay in the property. While some of these delays are inevitable, there are approaches and best practices that will mitigate the time a case spends frozen in a mediation program. By utilizing best practices, these cases which are ripe for mediation will be concluded quickly, and those not ripe should be moved back to foreclosure. Missing Documents and Elusive Clients Borrowers often do not understand the loan modification process or the required package of documents. One form filled out improperly renders the entire package useless. is issue leads to mediation sessions being continued numerous times to allow resubmission by the borrowers of their documents correctly and completely. While some borrowers diligently work to complete their documents, many lack that conscientious approach to mediations. More borrowers fail to submit documents, miss deadlines, and fail to communicate their interest and intentions for the property. e issue of missing documents coupled with partial facilitators leads to drawn–out mediation processes. Planting the Seed Approaching the mediation properly and with a positive attitude is extremely important. You must "plant the seed" with the mediator and the borrower. By making the other parties aware that you are going to fully participate in the mediation and do not take the process lightly, it is far more likely it will lead to a successful modification or termination quickly. It is helpful to explain to the borrower that you are not able to assist them without their own assistance; help me, help you. e lender is unable to offer any modification or assistance without the properly submitted documentation. Taking this approach will be effective in cases where the borrower is not diligent or is not truly interested in staying in their home. Expressing your commitment to working with the borrower and finding out their viable options will show the mediator that when you do in fact request termination, it is for good cause, not to avoid the mediation process. All mediations should be approached with this attitude, and the mediator should be aware that you want to participate fully and in good faith. By doing so when documents have been missing for several sessions or packages remain incomplete; it is more likely the mediator will terminate the mediation. Client Contact Lenders are busy and inundated with files; servicers can help the process providing a complete status on a file before the mediation session. Entering a mediation session without the status of a file should not be an option doing so shows the mediator and borrower that the matter is not being carefully monitored. Doing that you may not be participating fully and effectively. Client contact must be done strategically in order to push without being rude. Follow up early and often. Try different methods of contact. Escalate if necessary to the appropriate contact. It is important to get the status of the matter to report that documents are missing or incomplete and what is needed in ordered to review the borrower. Reporting a current and complete status at each session will reduce the number of sessions continued due to missing documents or unfinished review. Informing the borrower about which documents are missing and need to be submitted will also help facilitate the mediation in a timely manner. Viability Not every matter is appropriate for mediation. In counties where mediation is mandatory this issue can lead to wasted time and money in the form of additional attorney appearances and a delay in the inevitable foreclosure. Borrowers that have no desire, or are unable; to retain the home should not be in the program. e mediator should analyze the viability of the case accurately, to save everyone some time and money. It is important to attend the mediation with an assessment of whether or not the case is appropriate for mediation. Identifying the matter's viability before entering the mediation session is critical. Possessing information about the borrower's desires is helpful in determining what they seek to accomplish through mediation. A borrower may express their interests and desires in documents they have filed in court, through correspondence with the lender's counsel, or to the lender directly. By reviewing this information you will be aware if the borrower has previously submitted documents for a loan modification review or expressed interest in proceeding with a friendly foreclosure. Reviewing the complaint and loan documents to determine if there were previous modifications to the borrower's loan obligations will also give you an idea of the borrower's options and possibly their financial situation. NATIONAL