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Information on the Philadelphia Foreclosure Diversion program.

Thousands of homeowners have been able to prevent a foreclosure as a result of assistance from the Philadelphia Foreclosure Diversion Program. It has been successful in keeping almost 80% of families in their homes. If these families and homeowners had lived in other cities or jurisdictions, they more than likely would have lost their homes to the foreclosure process.

One of the main components of the mediation process is the conciliation conference program. Under this assistance program, a bank or lender can’t foreclose on an owner-occupied house without following the rules and regulations that have been put into place. The lender needs to first meet with the homeowner as well as a certified housing counselor. In addition to the meeting, the homeowner will also be provided with legal representation, counseling and other support.

After a homeowner in Philadelphia receives a delinquency notice from their bank or lender, the city court must begin the mediation process and schedule a conciliation conference. There are dozens of well trained, professional volunteers who work for nonprofit housing agencies and other organizations who will then proceed to visit delinquent homeowners, provide them with fliers and information about the conciliation and mediation process, and they will advise them to call a certain hotline that would link them to a free housing counselor who will provide further assistance. To date this process that has been put into place has been shown to be effective in communicating with troubled borrowers, as supported by statistics showing the number of homes that have been saved.

Lenders and mortgage servicers are forced to negotiate in good faith as part of the Philadelphia Foreclosure Diversion Program because the process and their foreclosure filings will not proceed if they do not first meet with the troubled homeowners. According to the Philadelphia Volunteers for the Indigent Program, the program has saved thousands of homes across the city.

The Philadelphia Foreclosure Diversion Program will ensure the parties involved in the process talk, and it forces some type of outcome by bringing together the homeowners and lenders into one room. If the lender or mortgage company does not cooperate, or if they prove to be unwilling to offer options to help the homeowner bring their mortgage current, then the homeowner has the right to request the mediation occurs in front of a volunteer lawyer who will serve as a provisional judge.




This judge will then relay recommendations to the mediation program’s supervising judge. At that point in time, if the judge who is now involved finds that the mortgage company, bank, or lender is not acting in good faith in this mediation process, the judge can then delay or stop the foreclosure process denying permission for a sheriff’s sale.

Mediation and conciliation conferences are held weekly, every Thursday morning, in the courtroom of the Philadelphia City Hall. Before the conference itself volunteer lawyers will talk with homeowners and then negotiate with corporate lawyers while borrowers wait in an effort to find some type of middle ground that will help the homeowner get back on track with their mortgage payments.

What are some of the outcomes?

It will vary based upon the borrowers financial situation, and the lenders policies. However, some homeowners will get mortgage modifications that enable them to waive fees and make lower monthly payments and therefore keep their homes. Some people just can’t be helped, and these people may be  advised to pursue other options, such as a short sale from the governments new Home Affordable Foreclosure Alternatives program, or they may be advised to accept cash to move out of their homes.





The Philadelphia Foreclosure Diversion Program has been fairly effective in helping implement the federal governments Home Affordable Modification Program. While that program is not mandatory for lenders to carry out, the mediation process has experienced more success in ensuring this occurs. What has happened in the past is it has been common for banks and lenders to reject or ignore loan modification applications without giving explanations, and the Philadelphia program helps to ensure these rejections do not occur.

To use foreclosure mediation in Philadelphia, dial 215-334-4663 to speak to lawyers and staff from the Foreclosure Diversion Program.

By Jon McNamara

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