Foreclosure Diversion Program
The FDP provides mediation in foreclosure cases at the request of a homeowner who lives in the property being foreclosed, and the property is their primary home. (Vacation properties, second homes, and commercial properties do not qualify for mediation.) Mediation in a foreclosure case includes the homeowner, the lender, attorneys on the case, and a neutral mediator. The mediator helps the parties talk about how they might settle their case. In mediation, the parties decide the outcome of the case.
On this page:
- Benefits of mediation in a foreclosure
- How to request mediation
- The Informational Session
- Homeowner preparation for mediation
- If you are unable to attend your scheduled informational session
- After mediation
Parties have a chance to talk with each other in an informal setting with the help of a mediator. Both sides share an interest in keeping the homeowner in the home and paying the mortgage.
A long-term benefit of mediation is improved communication between the parties. Mediation gives the homeowner and lender the chance to talk about how to meet their shared goals. The mediator can help focus the conversation and raise options the parties may not have thought of or known about.
Since the foreclosure mediation program began in 2010, approximately 60% of cases mediated have been dismissed (ended without a foreclosure).
Please do not ignore the court papers. Complete and return the Response to Complaint and Request for Mediation form included with the foreclosure court papers or send a written request to the clerk's office where your case is being handled. Request mediation within 20 days of receiving the court papers. Even if you miss this deadline, it is worth sending the court a request in writing if you think mediation might help because you might still be able to participate.
Before a case can be scheduled for mediation, the homeowner must attend an Informational Session. If you ask for mediation in writing by the deadline, the court clerk will schedule you to attend an Informational Session with other homeowners. You will get a notice in the mail to let you know when and how to come to the Informational Session. It will take place either at a courthouse or on Zoom. Lenders may attend, but are not required to attend, because this session provides information and help geared to homeowners in foreclosure.
Court staff will greet you, and you will learn from a judge about the general process in a foreclosure case. A HUD-certified housing counselor will talk about how to work with your lender. These presentations might be by video. After you have been to an Informational Session, you will have your first mediation session.
In mediation, you will have the chance to talk about your goals for the property, ask questions, and learn about your options. The lender will provide information on the status of the loan. You and the lender will discuss how you might avoid foreclosure and what documents will need to be submitted.
The mediator will help you and your lender come up with a specific plan to resolve the case, if possible. The mediator does not take sides or decide how the case should be resolved. At the end of each mediation session, the mediator writes a clear report on agreed next steps and deadlines. Learn more about mediation.
For every mediation session, the mediator writes a Mediator's Report. The mediator will review the report with you to make sure it is clear and that you agree with what it says. If you do not understand or agree with any part of the report, be sure to ask questions and ask the mediator to make changes before you sign the report. After you and the other party sign the Mediator's Report, the mediator will submit it to the court for your file and you will get a copy of it.
If another mediation session is needed, the Mediator's Report will say that, and the court will schedule a follow-up mediation session.
Before the Informational Session and mediation, think about your goals for the property. Do you want to stay in the home or move out? What is the market value of the property? How much do you owe?
Some alternatives to foreclosure that you may want to explore in mediation include:
- Permanent "loan modification;"
- Temporary or short-term "forbearance agreement and repayment plan;"
- Giving the lender a "deed in lieu of foreclosure;" or
- Having the lender approve a "short sale" of the home.
See Terms that may come up in your mediation for definitions of these and other terms.
Before agreeing to any specific approach, talk with a HUD-certified housing counselor. This is a free service to help you assess your financial situation. The housing counselor will offer specific suggestions on what options you may have to avoid foreclosure. A housing counselor will be present at your Informational Session, but you may want to contact a counselor before the Informational Session. Find HUD-approved Housing Counseling Resources in Maine.
You may also want to talk with a lawyer with experience in real estate foreclosure law. A lawyer can provide information on the legal process specific to your situation, help identify legal defenses you may have in the court case, and help you weigh options.
You do not need a lawyer to go to mediation, but if you are represented by a lawyer, your lawyer must attend mediation. See Get Legal Help for options for talking with a lawyer.
You are not required to bring paperwork to the first mediation session, but you may want to begin gathering some of the following to get ready to work with your housing counselor or lawyer:
- Any correspondence from the lender or mortgage servicer or its lawyer, even if the correspondence is unopened;
- Court papers (foreclosure complaint, copy of your response, etc.);
- Recent pay stubs or other source of income;
- Last two months' bank statements; and
- Last year's tax return.
If you cannot attend an Info Session by the deadline in the notice, you must ask the court to set a new deadline (to "continue" your court event). Your request must be in writing and be received before the deadline.
If you cannot attend a mediation on the date scheduled, you must ask the court for a new date by a "motion to continue" your mediation session. Again, your request must be in writing and sent to the clerk and the other parties.
Send your request to the court (with a copy to the lender) as soon as you can. See Motion to Continue Mediation in Foreclosure Action (FDP-004). Do not presume the court will grant your request. If you do not hear from the court that the motion to continue has been granted, you must attend the court event as scheduled.
Following each mediation session, the mediator submits a Mediator's Report to the court, describing plans and agreements made in mediation. If parties make an agreement to settle the case in mediation, the Mediator's Report describes the steps to close the case. When all the steps are completed and your case is settled, one or both parties must notify the court in writing. The case will then be over.
If you are not able to reach a final agreement in mediation but wish to continue to work towards a possible alternative to foreclosure with the lender, you may ask the court to "stay" the case (pause the case) for a period of time. If you and the lender agree on this, both of you will submit a Joint Motion to Stay Foreclosure Action Following Mediation (FDP-10).
If you are not able to reach an agreement in mediation and have no immediate plan to keep working together with the lender, the case is generally "returned to the docket" (put back on the court's schedule) and moves forward. However, you and the lender can try to settle the case at any point in the process, even up to and at trial. See Foreclosure Step by Step for more information on the foreclosure court process.
For general questions about mediation in foreclosure cases:
Maine Foreclosure Diversion Program
Laura Pearlman, Esq., Manager
Telephone: (207) 822-0706
Administrative Office of the Courts
P.O. Box 4820
Portland, ME 04122-4820