Local families can receive foreclosure assistance from a court-ordered mortgage mediation program. The program was created to help thousands of homeowners who are faced with losing their homes with getting out of foreclosure courts. This is an option for people who live in Indian River, St. Lucie, and Martin Counties Florida, or the so called Treasure Coast region of Florida. The program began in May, and since then the local courts have referred about 4,100 foreclosure cases to the free mediation program.
There are many local volunteers and organizations that are supporting the process, but the nonprofit program is run by the Collins Center for Public Policy (850 219-0082), which is based in Tallahassee
The aim of the program is to ensure that banks and lenders appoint someone in authority to negotiate with owners to find a solution that works for both the lender and the homeowner.
During 2009, there were 4,100 foreclosure notices filed in the Treasure Coast area, and about one fourth of them went through the mediation program. Those cases that were mediated have resulted in loan modifications, including lower monthly payments and principal reduction. In addition, the programs have brought together borrowers and lenders, many of which were angry and alienated, officials said. So the fact they are talking about solutions is a positive and a step in the right direction.
How does the Free Treasure Coast Foreclosure Mediation Program work?
During mediation, borrowers will finally be able to sit down with a representative from the bank or lender who can negotiate and make a decision that solves the problem. For homeowners, it is free program, but it is voluntary. On the other hand, lenders are required to pay a $750 mediation fee that also includes providing a credit counselor for the borrower to help them deal with their personal finances and debt they may have. You do not need an attorney. About 95 percent of the cases being processed involve people who don’t have attorneys and may not understand the mediation process and the law.
What are success rates?
It is definitely mixed. Some people are not taking advantage of the free mediation as they do not understand the progress. This is unfortunate as they have nothing to lose. Click here to learn more on the mediation process.
The good news is that many homeowners are getting help. One example is a plumber from Fort Pierce, Mr. McCutchen. Last year he lost his job and struggled with his $1,600-a-month mortgage payments on a three-bedroom townhouse he purchased way back in 2005 for $160,000. In the free foreclosure mediation session that took place at the Collins Center office in Port St. Lucie, his lender agreed to reduce his monthly payment by more than three-fourths, to only $462 per month, for up to five years. His payments were therefore lowered by $1,000 per month.
Some of the other solutions that can result from a mediation session include lower interest rates for several years, principal reduction, eliminating fees, and extending the term of the loan. Mediators can refer homeowners to solutions offered by many banks, such as mortgage assistance programs from Bank of America.
Another example of assistance being provided is people agreeing to turn their deed over to a bank so the property can be put bank on the market, thereby ending the court proceeding. This is called deed in lieu.
A wide variety of people are seeking help. Mediators are seeing and counseling people who ended up in serious financial difficulties because of health problems, unemployment, divorce, and medical emergencies.
Another big benefit of the mediation process is that it brings together in one room the homeowner, lender, and banks who have been previously antagonistic and blame each other for the problem. by bring people together, and facilitating communication, many problems can be solved, and solutions reached.
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