New mandatory foreclosure mediation program to start Thursday

A new mandatory foreclosure mediation program goes into effect in Delaware tomorrow/Thursday. This was established by Attorney General Beau Biden’s office and state lawmakers as part of a legislative package to respond to the foreclosure crisis in the state – and is modeled after other successful programs. Mandatory mediation can help people stay in their homes – which is better for everyone involved. Two open houses will be held in Sussex County on January 31 – from noon to 2pm at the County West Complex on Route 113 in Georgetown and from 6 to 8pm at the GW Carver Education Center on Frankford School Road in Frankford.

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NEWS RELEASE: Attorney General Biden, Legislators, Advocates Mark Launch of New Foreclosure Mediation Program

Wilmington – Attorney General Beau Biden was joined by a bipartisan coalition of legislators and advocates today to mark the launch of Delaware’s mandatory foreclosure mediation program. The program, which becomes operational Thursday, was established last year as part of a legislative package developed by Biden’s office and legislators to respond to the foreclosure crisis in Delaware. It is modeled after successful programs in other states and jurisdictions, including the City of Philadelphia and the state of Connecticut.

“The foreclosure crisis has impacted Delaware families up and down the state,” Attorney General Biden said. “Losing a home to foreclosure can be devastating, and borrowers deserve the opportunity to meet face-to-face with their lender and explore all available alternatives. Mandatory mediation can help people stay in their homes, and that’s better for families, lenders and the community.”

Recent years have seen a record pace of foreclosures in Delaware, with more than 25,000 foreclosure filings since 2007. The state experienced a record-setting year in 2010, with more than 6,400 filings. Biden’s office and legislators produced a package of bills, passed during the last legislative session, that address Delaware’s foreclosure crisis. That legislation strengthened the state’s existing voluntary mediation program in several key ways:

• Mediation is no longer voluntary. When a bank files a foreclosure complaint, the law now requires that lenders and borrowers sit down one-on-one and have a meaningful conversation about a payment plan or other options before a foreclosure can proceed.
• It eliminates the income qualification for homeowners.
• It establishes a filing fee, paid by the lender, to fund the program.
• It extends the time a homeowner has to respond to a foreclosure complaint. Previously, homeowners had 20 days to respond to a foreclosure complaint. Under the new program, the foreclosure process is put on hold when a mediation conference is scheduled, and a lender cannot seek judgment until after the mediation conference takes place.

The mandatory foreclosure mediation program serves Delawareans who own a one- to four-unit home, who reside in the home as their primary residence, and whose mortgage is foreclosed upon on or after January 19, 2012. The program runs through January 2014.

Rep. Helene M. Keeley, D-Wilmington South, noted that several of her constituents are facing foreclosure. She said that the initial voluntary mediation process was a great first step, but requiring that lenders and homeowners sit down to work out an agreement will help more people stay in their homes.

“Losing your biggest investment – your home – is nothing short of catastrophic for a person. By providing this additional step, we are ensuring that more homeowners will have the opportunity to stay in their homes and keep a roof over their heads,” Rep. Keeley said. “We hope that this mortgage mediation program will address the issue of a record number of foreclosures and that in a couple years, when this program sunsets, there will not be a need for it.”

“This process provides a lifeline for many homeowners who are facing the possibility of losing their homes and need to find a solution to possibly keep a roof over their heads,” said Sen. Bethany Hall-Long, D-Middletown. “It’s not only vital for the people facing a foreclosure action, it’s also vital when it comes to maintaining healthy communities and I’m honored to have been a part of this effort.”

“This program will provide a renewed resilience for homeowners faced with the loss of their most prized and personal possession – their home,” said Rep. John A. Kowalko, D-Newark. “There is no way to exaggerate the needs of families who are struggling in these desperate times. Their safety and security are in jeopardy and it is the state’s responsibility to provide resources and expertise so that families can stay in their homes. This process being implemented today is a huge step in the right direction to help them.”

State Representative Mike Ramone, R-Middle Run Valley, a prime House sponsor of the bill establishing the foreclosure mediation program, said, “I am thrilled that we are rolling out this very important program. As I have stated before, the foreclosure process is our new reality, unfortunately. This program is vital to providing those many families faced with the painful prospect of losing their homes with the opportunity of working with a mediator – something they may not normally had the chance to do prior to this bill being enacted last year. Mediation has been a viable option in helping families in other areas. It is my hope that Delawareans in a similar situation will find the help they need with this new program.”

The legislation was also sponsored by House Speaker Rep. Robert F. Gilligan, D-Sherwood Park.

Eligible homeowners will be provided with detailed information about the foreclosure mediation program when a foreclosure is filed against them. Homeowners can learn more about this program by calling the Attorney General’s Mortgage Hotline at 800-220-5424, e-mailing mortgage.mediation@state.de.us, or visiting www.attorneygeneral.delaware.gov/mortgageforeclosure or www.deforeclosurehelp.org.

In a continuing response to the ongoing foreclosure crisis, the Department of Justice will also hold open houses throughout the state in the coming months to answer residents’ questions, introduce new programs and assist in resolutions:

SUSSEX COUNTY
January 31: 12 p.m. – 2 p.m.
Sussex County Administrative Office, Open House
22215 DuPont Blvd, Georgetown DE (next to M& T Bank)

6 p.m. – 8 p.m.
G.W. Carver Education Center
30207 Frankford School Rd., Frankford, DE 19945

WILMINGTON
February 8: 12 p.m. – 1 p.m.
Wilmington City Council Chambers
800 French St., Wilmington, DE 19801

NEW CASTLE COUNTY
February 9: 12 p.m. – 2 p.m. & 6 p.m. – 8 p.m.
Gilliam Community Room, Department of Community Services
77 Reads Way, New Castle, DE 19720

KENT COUNTY
February 21: 5:00 p.m. – 7:30 p.m.
Kent County Public Library
497 S. Red Haven Lane, Dover DE 19901

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