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Foreclosure Diversion Mediation Program Provides Forum For Homeowners & Lenders

© Bangor Daily News Photo By John Clarke Russ
Cathy McKelway, a H.U.D. certified housing counselor, provides advice to struggling homeowners on foreclosure mediation during a foreclosure diversion informational session at the Penobscot Judicial Center.

The 124th Legislature authorized the creation of a Foreclosure Diversion Mediation Program to provide the parties in certain foreclosure actions the opportunity to participate in court sponsored mediation. Building upon the lessons learned from a summer 2009 pilot project in York County, the Court implemented a statewide foreclosure mediation service that began operating on January 1, 2010.

During the first year of statewide operation, the program trained and certified 71 mediators and conducted 1,243 mediations. Of the cases that concluded mediation in 2010, 21% reached a settlement agreement and 98 foreclosure actions were dismissed. Loan modifications accounted for nearly two-thirds (63%) of the dismissals. Overall, the experience revealed that the agreements that lead to the dismissal of the foreclosure require months of negotiation by the parties. One of the most common results of the mediation process was a request by the parties for more time to gather information and to evaluate settlement possibilities. The program will continue to monitor its progress and impact on the parties and the docket.

For more information, please visit the Foreclosure Diversion Program section of the Judicial Branch website.