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Mandatory Face to Face Mediations Lower Foreclosures in Philadelphia

November 23, 2009

Our Highland loan modification attorneys are seeing more and more reports lately about seeming successes in foreclosure mediation programs. Most recently, on Nov. 17, the New York Times ran an article about a Philadelphia program that has had at least some success slowing the tide of foreclosures in that city. In Philadelphia, lenders may not foreclose on owner-occupied homes before a "conciliation conference," a mandatory face-to-face meeting between the homeowner and a representative from the lender to discuss alternatives to forecloure. While few hard numbers are available to document the program's success, it is credited with allowing hundreds of Philadelphians to keep their homes. Some cities have already replicated the program, and others, including Boston, are hoping to do so.

The Philadelphia program combines mandatory loan modification meetings with education and support for borrowers. Nonprofit organizations visit foreclosed homes in person to explain this right to homeowners and connect them with free housing counselors. At the conciliation conference, homeowners get counseling and sometimes a volunteer attorney to help them understand their rights. The nonprofit Philadelphia Volunteers for the Indigent Program says that, of 61 cases it has resolved, 35 produced loan modifications. Five others ended in conventional foreclosure sales, while the remainder ended up with loan forbearance and repayment plans; bankruptcies; sales or deeds in lieu of foreclosure. However, all of the loan modifications the Philadelphia program has produced are temporary, which critics say allows lenders to erect obstacles to renewal.

Nonetheless, the program provided at least a temporary respite for Philadelphian Christopher Hall. Hall, 42, was at risk of losing the row house that once belonged to his grandfather and mother. He bought the house from his grandfather in the 1990s, but took out a new mortgage in 2006 to pay off debt and make repairs. That mortgage turned out to be a variable-rate loan, something he says he didn't understand at the time. His payments nearly doubled, and then he lost his job as a union roofer, sending his income plummeting. He expected to lose the home at a foreclosure hearing in October, but thanks to the conciliation conference, he got a six-week delay intended to give his housing counselor time to work out a more permanent loan modification.

As Perris loan modification lawyers, we are pleased to see reports of foreclosure prevention programs doing the job they're designed for: preventing avoidable foreclosures. This article describes Philadelphia's program as similar to the federal Home Affordable Modification Program, but mandatory. We agree that requiring participation is certainly one way to increase loan modifications, but we also believe the face-to-face meetings, in the presence of a counselor or attorney, are an important part of this plan. As a Boston city official notes in the article, the ability to look the other side in the face can be "disarming," especially if you're armed with delays, excuses and half-truths. And having a professional, well-informed advocate can make a huge difference simply by educating homeowners about their rights and their legal options.

Howard Law LLP advocates for homeowners facing foreclosure, whether they're part of a foreclosure prevention program like HAMP or simply fighting a loan servicer on their own. Our Santa Ana loan modification attorneys hear over and over again from clients who have tried to modify loans on their own, only to have loan servicers lose paperwork, ignore their phone calls or give them contradictory information. We believe our status as lawyers quickly changes their tunes, because they understand that we can and will sue them if we find unfair dealing and legal violations in their behavior or the loan's history. In fact, we examine each new case we take for evidence of predatory lending and will absolutely file a lawsuit if we find it -- a lawsuit that can cancel the loan and refund all payments. We try to leave every client in a better financial position than before, whether that means a lawsuit or aggressive negotiations with loan servicers.

If you're struggling to get your loan servicer to consider your application, Howard Law can help. To set up a free, confidential evaluation of your case, please contact us through our Web site or call 1-800-872-5925 today.