• 05
  • March

As discussed in the previous post, a recent article published by the South Florida Sun-Sentinel discusses how few of the foreclosure cases that are referred to mediation are actually ending with a written settlement between lenders and homeowners. Part of the problem is that banks are failing to bring the necessary paperwork to mediation sessions or provide it to homeowners in the proper amount of time before the mediation session or they are providing paperwork with errors.

Lenders say that the problem is not that they are deliberately trying to get the mediation sessions canceled, but that they are too swamped to have the paperwork ready in time. There were an estimated 350,614 foreclosure cases backlogged at the end of 2010. Mortgages have also been repackaged as securitized investments, which has made it hard to track down the necessary paperwork in a timely manner banks say.

The bank's current appraisal of the homeowner's property and current value of the mortgage are necessary to determine whether the loan can be repaid. According to the Sun-Sentinel, this information can also determine whether a homeowner is eligible to receive federal assistance in the form of the HAMP loan modification program. Homeowners are also legally entitled to request a plaintiff's disclosure, which includes documented evidence that the bank owns and holds the mortgage note.


Foreclosure crisis: Lenders holding back critical information at mediations (Sun Sentinel)