New Pennsylvania Mortgage Programs
April 22, 2013


MORTGAGE DIVERSION PROGRAMS AND MORTGAGE MEDIATION PROGRAMS

 

Since my last blog about foreclosure remedies, I am happy to report that there are now additional programs to assist homeowners in foreclosure or nearing foreclosure.  Many counties in Pennsylvania and other states now have mortgage diversion programs.  The purpose of these programs is to permit homeowners in foreclosure, or, on the verge thereof, to apply for mortgage modification through a Court supervised process.  Because of Court supervision, and the cooperation of the parties the resulting mortgage modifications are more numerous, and involve more satisfactory results.

Basically, the procedure requires the homeowner to notice the mortgage holder to participate in the program.  At this point, a Mediator is appointed.  Based on Court rules, the homeowner is required to provide necessary documentation for review by the mortgage holder.  This process creates a standard whereby the mortgage company can be assured that they receive the documentation in a timely fashion.  Moreover, the homeowner can be satisfied that their documentation is being promptly reviewed by the lender.  Based on the strict time lines and Court supervision, the chances of success are greatly enhanced.

Based on the success of County Courts, some of the Bankruptcy Courts have also adopted the mortgage mediation process.  The process is very similar to the County Court process, but involves cases where foreclosure has been stayed by bankruptcy proceedings.  Again, the mortgage mediation process is governed by the Bankruptcy Court rules, so there is a standard by which the parties understand the process and the necessary documentation required for mortgage review.  Additionally, because of the timeline set out by the Court rules, the lender and homeowner have the same expectation of the duration of the process. Additionally, the parties can avail themselves of assistance of the Court, if necessary.  If you need more information about these programs, contact your County Bar Association in Pennsylvania, or, the Clerk’s Office in Bankruptcy Court.