Two ways a District homeowner can mediate with a lender before a foreclosure sale
A lender that wants to foreclose on a home in the District of Columbia has to choose one of two routes, and each route comes with its own chance to meet with the lender and a neutral mediator. If the lender mailed you a Notice of Default on Residential Mortgage, the mediation is run by the Department of Insurance, Securities and Banking, known as DISB, and you have to ask for it within 30 days. If the lender filed a case against you in DC Superior Court instead, the judge normally orders the mediation as part of the case.
This page explains both. It covers the deadline and the paperwork for the DISB program, what the lender has to bring and do at the session, how the court's mediation is scheduled and run, and who can sit with you for free at either one. The District's free counseling program, with its hotline and its hours with a lawyer, is described on the page about the Washington DC foreclosure prevention program for homeowners.
In both mediations the mediator does not decide anything, and an agreement only exists if you and the lender both sign it. In a court case the court provides the mediator, and the DISB program charges a small fee, which is printed on the notice.
The paper you received decides which mediation you get
A Notice of Default on Residential Mortgage arrives by certified mail and by regular mail, and a copy goes to anyone else whose name is on the title. It states what you owe and the amount that would bring the loan current. Inside the same envelope there should be a mediation election form, the lender's own application for help, a description of every program the lender offers and who qualifies, and a resource sheet from the District. There should also be two addressed envelopes, one for the lender and one for DISB's Mediation Administrator.
The lender has to send a copy of the notice to the District and record it with the Recorder of Deeds, and DISB then writes to you on its own. Its first letter should reach you within a week of the lender's mailing, and a second reminder should come within about three weeks. Both say the same thing: you are eligible for mediation, the deadline is 30 days from the date the lender mailed the notice, and you should call the Mediation Administrator right away if any part of the packet is missing.
A summons and a complaint from DC Superior Court mean the lender chose the court instead, and the DISB program does not apply to your case. Most lenders in the District now tend to go this way. The case still normally includes a mediation, but it is run by the court's Multi-Door Dispute Resolution Division, and it is explained further down this page. A notice from a condo association about unpaid fees is a third situation, and neither mediation program covers it, so a lawyer should see that notice the same week it arrives.
Asking for DISB mediation within 30 days
The mediation law covers a loan on a property in the District with four or fewer homes on it, including a condo or a co-op unit, as long as the loan is in a person's name rather than only a company's. The property does not have to be the place you live, so a small rental building you own counts too.
To get mediation you mail three things to the Mediation Administrator in the DISB envelope: the election form and the lender's application for help, both filled out, and the fee, which is paid to the D.C. Treasurer and is not refunded. The packet calls that application a loss mitigation application. DISB asks for proof of income with it, such as your last two years of tax returns, W-2s, your last two pay stubs, and any benefit or bank statements that show money coming in. A copy of the election form and the application goes to the lender in the second envelope, and keep a copy of everything for yourself.
The 30 days run from the date the lender mailed the notice, not the day you opened it, and the notice prints the exact deadline. Sending the application to the lender by itself does not extend that deadline, because only the election form and the fee at DISB count.
If the deadline passes, you lose the right to mediation unless the Mediation Administrator agrees to excuse the delay for a good reason. The administrator then issues the lender a certificate between 45 and 60 days after the mailing, and the lender can move toward a sale.
The Mediation Administrator can be reached at 202-442-7848 or [email protected], and the office can send you any form that was missing from the packet. Blank copies are also on DISB's foreclosure mediation forms page at https://disb.dc.gov/page/foreclosure-mediation-program-forms. Free written translation and an interpreter may be available for the program if you ask, and a counselor from the District's hotline can help you fill everything out.
What the lender has to bring and do at the session
The Mediation Administrator schedules the session to begin no later than 90 days after the notice was mailed, and the whole process has to end within 180 days of that mailing, with one 30-day extension if both sides agree. DISB's own description of the program at https://disb.dc.gov/service/information-homeowners-foreclosure-mediation-program-fmp calls the session a face-to-face meeting with a mediator DISB appoints, so ask the administrator how sessions are being held when yours is scheduled.
You can bring a lawyer or another person with you, or send a representative in your place if you give that person authority to settle for you. The lender has to send someone who can change the loan or agree to another option during the session, or who can reach a person with that authority while the session is going on. The lender's representative also has to bring the results of its review of your application, a true copy of the mortgage and the note, every assignment of the loan, and proof that it has the right to foreclose.
Both sides have to mediate in good faith, and the District law link at https://code.dccouncil.gov/us/dc/council/code/sections/42-815.02 spells out what that means for a lender. It has to check whether you qualify for every option it offers and then offer the ones you qualify for. It also has to use a set formula to compare what it would collect from a modified loan with what it would collect from a sale, and it has to give you a written explanation, with its analysis, if it turns down a proposal you make. A lender that skips the session, does not bring the required documents, or does not act in good faith owes a penalty to the District.
What you can ask for at the session is the same list a counselor would ask a lender for outside mediation: a repayment plan, a forbearance, a loan modification, a refinance, a short sale, or a deed in lieu of foreclosure, which means signing the property over to the lender rather than waiting for a sale. If you miss the session without a good reason, the administrator issues the lender's certificate within 10 days.
How a DISB mediation ends
If you and the lender agree, the terms go on DISB's settlement agreement form and both sides sign it. A lender that breaks that agreement owes a penalty to the District and still has to carry out the terms. If you are the one who falls behind on the agreement, the lender applies to the administrator for its certificate, which is normally issued within 10 days.
If there is no agreement, the mediator sends the administrator a report within 10 days of the last session. Within 10 days after that, the administrator either issues the lender a preliminary certificate, if the lender acted in good faith, finds that the lender did not act in good faith, or sends the case to a different mediator.
A preliminary certificate is not final for 30 days, and during that time you can appeal to DC Superior Court, which stops every foreclosure step until the appeal is decided. If you do not appeal, the lender asks for the final certificate and records it. A finding of bad faith has the opposite effect: the lender has 30 days to appeal, and if it does not, the notice of default becomes void and the lender has to start over from the beginning. A sale held without a final recorded certificate is void under District law.
Mediation inside a DC Superior Court foreclosure case
When the lender files in court, you receive a summons and a complaint, and you have to answer by the deadline printed on the summons or the lender can win by default. At the first hearing, or at a later status conference, the judge schedules the case for mediation with the court's Multi-Door Dispute Resolution Division at https://www.dccourts.gov/superior-court/superior-court-divisions/multi-door-dispute-resolution-division/mediation/civil-mediation and gives you a written order with the date and the instructions.
Before the session you fill out the court's Residential Foreclosure Confidential Settlement Statement, which tells the mediator about your situation and what you are hoping to work out. The mediator calls you about a week before the session to go over it. Multi-Door emails the link and your case manager's contact information 7 to 10 business days ahead, and sessions are held online unless you ask for an in-person session within a day of that email and everyone agrees.
Foreclosure sessions are short, usually 45 minutes, and are held on Tuesday, Wednesday, and Thursday mornings. If both sides think another session would help, the court may schedule one. An agreement reached in mediation is filed with the court, and if there is no agreement, the case moves on to a pre-trial date and the lender can ask the judge for a judgment that allows a sale.
On foreclosure days there are usually counselors and lawyers in the courtroom who help at no charge, and a counselor from the District's program can prepare you for the hearing and the mediation both. If you are not sure of your next court date, the Civil Division clerk's office at 202-879-1133 can look it up, and Multi-Door's office at 410 E Street NW answers at 202-879-1549.
Free lawyers for either mediation, and what counselors do
The resource sheet in the DISB packet lists lawyers who may represent a lower-income homeowner at the mediation at no charge. Legal Aid DC may be able to take a foreclosure case, depending on its caseload, and you can reach its intake line at 202-628-1161 or apply on its website. Legal Counsel for the Elderly, part of AARP at https://aarp.org/legal-counsel-for-elderly, advises any District resident age 60 or older through its hotline at 202-434-2120, and it may represent older homeowners in foreclosure cases when they meet its income limit.
Housing counselors help in a different way. A counselor from the District's foreclosure prevention program can go through the packet with you, fill out the election form and the application, and gather the income papers. That program may also pay for a limited number of hours with a lawyer once a lender has started the foreclosure. DISB's own resource sheet says counselors will not usually attend the mediation itself, so the person representing you there is normally a lawyer or someone you choose.
Every notice of default has to name at least one counseling agency approved by HUD, and the District has several of them. They are listed on the page about Washington DC HUD foreclosure counseling agencies. Check with an agency before you count on it, because some of them only run classes for people buying a home.
If mediation does not save the home
Once a lender has a final certificate from DISB, it still cannot sell the home right away. It has to send you a Notice of Intention to Foreclose, by certified and regular mail, and send a copy to the District at least 30 days before the sale date, with the 30 days counted from the day the District receives it. The sale date and time are on that notice.
District law also gives you a last chance to keep the loan. Up to five business days before bidding starts, at either a trustee's sale or a court-ordered sale, you can bring the loan current by paying everything past due plus the lender's foreclosure costs, in cash or by cashier's check or certified check. You can only use this right once in any two consecutive calendar years, but when you do, the loan goes back to the way it was before the default.
A sale in a court case follows the court's judgment instead of a DISB certificate. What happens after any sale, including the steps a new owner has to take before you have to leave, is covered on the foreclosure prevention page.
The deadlines on this page come from District law and the court's rules, but the date that counts is the one printed on your own notice or court order. If the two do not match, call the Mediation Administrator or the court's clerk before the earlier date, and do not wait for a second letter to act.
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