At the height of the financial crisis in 2008, the Connecticut Superior Court instituted its Foreclosure Mediation Program. Using that program, I help homeowners save their homes from foreclosure without bankruptcy. Here is an overview of how it works.
Foreclosure mediation is intended to insist homeowners in residential mortgage foreclosures, so certain eligibility restrictions apply. Mediation is not available in foreclosures of condominium liens or tax liens. The real property being foreclosed must be one-to-four family, and occupied by either the owner or the owner's "permitted successor-in-interest" (either the spouse of a deceased borrower who now holds sole title to the property, either through an inheritance or survivor rights in the deed; or a spouse of a borrower who became an owner through a divorce judgment or a legal separation, so long as the former spouse and all borrowers consent to the release of non-public personal financial information by the bank during the mediation process).
Mediation must be requested within 15 days of the return date in the case, so it is important to retain counsel as soon as you are served with the foreclosure complaint. If that deadline has passed, however, all is not lost. It is possible to claim the case to the mediation program by filing a motion, within the court's discretion. In either event, time is of the essence.
If the court determines your foreclosure case is eligible for mediation, you won't, technically, be in a mediation quite yet. Instead, a "premediation" process begins, which allows the mediator to determine whether mediation will be helpful, given the loan history and the goals of the homeowner. Loss-mitigation options may also be explored. During the premediation period, the bank and the homeowners exchange a great deal of information. The information the bank is required to disclose includes a detailed account history with reinstatement figures, contact information for a person who can answer detailed questions about the loan, and much more. The borrower is required to provide information about what caused the default, and a great deal of personal financial information. It is important to have the assistance of counsel in this exchange. The premediation period must conclude within 84 days from the return date, unless extended by the court, at which time the mediator must file a premediation report with the court which indicates whether mediation proper will be scheduled.
If the case proceeds to mediation it is possible to negotiate a reinstatement or a modification of the mortgage, which may reduce the interest rate and/or the monthly payment amount upon successful completion of a trial period. Although the owner is required to attend the first mediation session with his or her attorney, I can represent you at subsequent sessions, provided you are available by phone.
Mediation is a voluntary process for both sides. I will do my best to organize your information and present your case so that the bank is unlikely to say "no", and I have had much success Helping homeowners in these cases. A chapter 13 wage reorganization is also a powerful tool for saving your home. But where the main issue is a defaulted mortgage and there isn't a great deal of credit card or tax debt it often makes sense to try mediation first.
If you would like to schedule an appointment to discuss further, please contact me.