But court can’t help consumers who don’t seek the option.
According to a an Article in the Dayton Daily News in various parts of Ohio, mediation could be a borrower’s last lifeline — negotiating revised loan terms and a household budget that could keep a family in its home. Another outcome could be to allow a borrower to walk away without ruined credit.
The enormous scope of the problem, however, and the lack of resources likely play a part in judges’ reluctance to handle the cases as other than fast-tracked paperwork, said Randall J. Smith, an attorney at Miami Valley Fair Housing, a nonprofit consumer and civil rights advocate.
“But the communities don’t have the resources to deal with thousands of vacant homes either,” he said.
In a typical mediation, a mediator negotiates in an informal and friendly way with separate parties to arrive at a mutually agreeable solution.
Smith, who is juggling 18 cases of predatory loan victims and 56 with crushing mortgages, wants judges to do more. He cites one of his cases in which a client’s request June 24 for mediation was squashed Aug. 17 when the financial institution balked.
The lender requested a sheriff’s sale Wednesday, Aug. 26. The client has a job and “sufficient income to have a successful mediation,” said Smith, who is still trying to get the case there.
The client, Roslyn Thornton, 49, of Trotwood, said she’s filed for bankruptcy but would like to keep her home of 20 years.
“If I can adjust my payments to something affordable,” she said. Her current monthly payment is $1,100.
Thornton, a teacher’s aide still struggling from an airline industry layoff following the 911 terrorist attacks, said she could afford $800. “Bankruptcy was a bad word in my family, but I have to suck it up and do it,” she said.
Jim Drubert, Montgomery County Court General Division administrator, said that despite dwindling resources and the recent retirement of the court’s only full-time mediator, an additional 50 foreclosure mediation cases could be handled.
Montgomery County administrative Judge Michael T. Hall said he wouldn’t hesitate to order mediation.
“If I thought there was a chance of some resolution, I would order it,” he said. “The number (sent to mediation) is small, we have targeted some. But those received poor response from the consumer.”
Hall’s records show 62 cases directed to mediation by a judge. But of those, 40 home owners did not respond. Of the rest, 13 are pending mediation or in process, seven were settled with the lender prior to mediation or went to mediation, and two referrals were canceled.
Eileen Pruett, administrator for the Franklin County Foreclosure Mediation project, said more than 4,000 foreclosure actions were filed since Jan. 1. Franklin County is settling far more foreclosure cases with mediation.
“My estimate is that we are keeping 30 percent” of completed mediations “in their homes,” she said. Of the completed mediations, 132 homeowners have been kept under roof, Pruett said.
Smith said he wishes Montgomery County were more like Franklin. “We should be more user-friendly for homeowners and have easy forms for them to fill out online,” Smith said.
Judge David E. Cain, one of 17 on the Franklin County bench, said he has 211 foreclosure cases pending on his docket. All a homeowner need do is ask for mediation and it will be granted in his court, he said.
“A few of them get mediated and resolved,” he said.
According to Hall, all Montgomery County foreclosure summons that have been mailed since 2007 include information on agencies that could help.
He said mediation would be ordered by a judge even when lenders object, but too many aren’t willing to go that route — a position hotly disputed by consumer advocates.
“The vast majority of the cases we get in foreclosure, people have already moved out,” Hall said.
Smith said it’s a stretch to expect consumers to petition effectively for mediation without legal counsel. It would be beneficial if the courts would attach a simple form requesting mediation to every mailed notice of foreclosure, he said.
With attorney fees that can run from $125 to $250 an hour, and pro bono attorneys in short supply, the upshot is abandoned homes. While mediation can take months, a judge can wrap up a foreclosure with a default judgment in 20 minutes, Smith notes.
Drubert said he doesn’t believe judges are so harsh. A simple letter from a borrower — not a formal, legal plea — should trigger mediation.
“I would argue strenuously that no judge on the bench would route a case just to save time and work,” he said. “A good judge would not do that. And we have good judges.” (This is re-print from the Dayton Daily News).
