Providence Rhode Island foreclosure mediation

The Mayor of Providence Rhode Island put into place a city ordinance that will ensure lenders and banks meet with homeowners before foreclosing on their home. The rule puts in place a mandatory mediation process. The details of the Providence Foreclosure Mediation Ordinance include:

• The program provides a safety net for owner-occupied homeowners who are behind on their mortgage, and who are facing an imminent foreclosure of their home. There will be a mandatory mediation process put in place between the homeowner and the bank, lender, or mortgage holder, which will in effect slow down, delay, or ideally prevent the foreclosure from occurring.
   
• Both the homeowner and the mortgage holders will be required to meet with a negotiator/professionally trained mediator. This third-party needs to be a HUD-approved, independent counseling agency that specializes in foreclosure mediation. This professional needs to be used prior to entering into the foreclosure process.
   
• The City of Providence and the local court system will not accept a deed that is filed by the lender or mortgage holder until all required steps set forth in the Providence Foreclosure Mediation Ordinance have been completed.

The main goal of the foreclosure mediation ordinance is to delay the process, and allow time so that the homeowner and lender can agree to and arrange a modified payment plan as an alternative to filing a foreclosure and the homeowner losing their residence. The process requires that a meeting between homeowners and lenders takes place, and it needs to be moderated by an independent third party that is approved by the federal Department of Housing and Urban Development. A state agency, Rhode Island Housing, has agreed to be that third-party counseling agency that supplies mediators and works with all parties involved.

Any mortgage holder or bank that fails to comply with the requirements of this assistance program would not be able to file a deed of ownership with the city, which is a step that is necessary to complete the foreclosure process. This new ordinance put in place will make a big difference, as it provides real incentive for banks or mortgage servicers to work with the homeowners because they won’t be able to file a deed with the city. This will help reduce the number of people who lose their homes, and will ensure families are offered mortgage modifications and other alternatives.

If you are facing a foreclosure, be sure to ask your mortgage holder about this mandatory option.