Mediation


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  On May 13, 2013 I wrote to you about the Nevada Homeowner’s Bill of Rights.  The link is here.

Short Sale – “Dual Tracking” and the Homeowner’s Bill of Rights in Nevada May 2013

Tomorrow October 1, 2013 it becomes law.  You can review the law by clicking the post above. As a reminder here are some bullet points that affect sales:

TO WHOM DOES IT NOT APPLY, YOU ASK?

(a)    Notice that these additional restrictions apply only to a notice of default and election to sell which is recorded on or after October 1, 2013.

(b)   Lenders with less than 100 foreclosures per year, are exempt.

(c)    A lender that complies with United States of America et al. v. Bank of America Corporation et al., is exempt from these provisions.

UNIQUE EFFECTS OF THE  LAW

Duel Tracking Prohibited.  Prohibits the lender  from continuing the foreclosure process while an application for a foreclosure prevention alternative is pending (short sale). (Section 13).

Arm’s Length Not Required. Sec. 16.5. declares a short sale cannot be denied based upon the . No provision of the laws of this State may be “non arm’s length,” in other words, if you relative buys the property, that cannot be the reason for lender denial.  This is big point, the exact language if a lender asks for it is “Sec. 16.5. 1. No provision of the laws of this State may be construed to require a sale in lieu of a foreclosure sale to be an arm’s length transaction or to prohibit a sale in lieu of a foreclosure sale that is not an arm’s length transaction.” That’s found on page 17 of Nevada Senate Bill 321.

Single Point of Contact. The Lender must provide a single point of contact for a borrower who requests a foreclosure prevention alternative (short sale).

Notice of Information. At least 30 calendar days before recording a notice of default and election to sell and at least 30 calendar days after the borrower’s default, the lender must provide to the borrower information concerning the borrower’s account, the foreclosure prevention alternatives offered by the lender and a statement of the facts supporting the right of the mortgagee or beneficiary to foreclose.

Rescission of Notice of Default.  Any notice of default and election to sell recorded must be rescinded, and any pending foreclosure sale must be cancelled, if:

(a)    The borrower accepts a permanent loan modification

(b)   A notice of sale is not recorded within 9 months after the notice of default and election to sell is recorded

(c)    A foreclosure sale is not conducted within 90 calendar days after a notice of sale is recorded.

Did you catch that? A foreclosure has to start over, including new recording of notice of default, if the foreclosure does not take place if 1.) a notice of sale is not recorded 90 days after the notice of default and then the next deadline is 2.) if the foreclosure does not take place 90 days after the notice of sale.  That will be interesting.

$50,000 Penalty. If a Court finds a lender in violation of this law, the Court can order and award to the borrower the greater of treble actual damages or statutory damages of $50,000.

Alright, that should make it fun until Christmas 2013 at least.

OTHER SHORT SALE POSTS

7 Tips for Short Sale

Addendum to Short Sale Listing 1.26.2010

Advance Fees Continued and the FTC 1.6.2011

Advance Fees – Short Sales – FTC II 5.4.2011

Charging for negotiating short sales/Negotiators 10.1.2010

Deficiency Judgments Nevada 4.27.2007

Foreclosure and the One Action Rule in Nevada 4.10.2007

HAMP the Federal Shortsale Program coming April 2010

HUD Suspends Pending Dual Agency Limitation – Short Sales 9.26.2013

Income Taxes & Foreclosures/Shortsales 12.21.2007

Income Taxes & Foreclosure/Short Sales 2013 Update

IRS PUBLICATIONS shortsales/foreclosures:

Ten Facts about Mortgage Debt Forgiveness

IRS publication on how 1099 taxes are calculated, exempt, etc.

IRS explanation as to taxes resulting from Foreclosure and Debt Cancellation.

Judicial Foreclosures (Short sales are looking more attractive..) 3.23.2012

Lender Short Sale Approval Addendum

Nevada Supreme Court Mandatory Mediation Program and How it Affects Shortsale

Nevada Short Sale Documents

Seller Being Released From Liability Language in Shortsale

Seller Liability After Short Sale 4.20.2007

Short Sale Advanced Fees

Short Sale Addendum to Purchase Agreement October 2010

Short Sales and Bankruptcy and Waiting Periods 10.5.2012

Short Sale Junior Lien/Senior Liens Rights To Sue & Other Changes

Short Sale Wallet Size Answer Sheet

Questions? email me darren@dwelshlaw.com

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Web’s Chicken Coop

“Short Sale – Dual Tracking” during residential foreclosure is where the lender pursues foreclosure AND other loan modifications (short sales) simultaneously.

SB 321 has passed and is set to be signed by the Nevada Governor.

It affects foreclosure both statutory and judicial of owner-occupied property; providing civil remedies for failure to comply with certain provisions.  It extends the foreclosure mediation process to judicial foreclosures.

It is complicated and mostly concerns actions leading up to foreclosure.

However, for re-sales, likely the most important is the elimination of the practice commonly known as “dual-tracking” by prohibiting the continuation of the foreclosure process while an application for a foreclosure prevention alternative is pending or while the borrower is current on his or her obligation under a foreclosure prevention alternative.  So, for example, if the owner enters into an arrangement with the lender, a foreclosure prevention alternative, which could arguably include a short sale, the lender is prohibited from continuing the foreclosure process until such time as the foreclosure prevention alternative is ended. This may end the surprise foreclosures the day before short sale close of escrow.

Read the whole bill here:  SB 321

Here is the Nevada Legislative Counsel’s Digest:

  Under existing law, the trustee under a deed of trust concerning owneroccupied housing has the power to sell the property to which the deed of trust applies, subject to certain restrictions. (NRS 107.080, 107.085, 107.086) Existing law also provides for a judicial foreclosure action under certain circumstances for the recovery of any debt or for the enforcement of any right secured by a mortgage or other lien upon real estate. (NRS 40.430)

  Sections 2-16 of this bill establish additional requirements for the foreclosure of owner-occupied housing securing a residential mortgage loan.

  Under section 7.5 of this bill, these additional restrictions do not apply to a financial institution that, during its immediately preceding annual reporting period, as established with its primary regulator, has foreclosed on 100 or fewer owner-occupied homes located in this State.

  Under section 30 of this bill, these additional restrictions apply only to a notice of default and election to sell which is recorded on or after October 1, 2013.

  Section 10 of this bill provides that at least 30 calendar days before recording a notice of default and election to sell or commencing a judicial foreclosure action and at least 30 calendar days after the borrower’s default, the mortgage servicer, mortgagee or beneficiary of the deed of trust must provide to the borrower certain information concerning the borrower’s account, the foreclosure prevention alternatives offered by the mortgage servicer, mortgagee or beneficiary and a statement of the facts supporting the right of the mortgagee or beneficiary to foreclose.

  Section 11 of this bill prohibits the recording of a notice of default and election to sell or the commencement of a judicial foreclosure action involving a failure to make payment until the mortgage servicer complies with certain requirements regarding contact with, or attempts to contact, the borrower.        Section 13 of this bill prohibits the practice commonly known as “dual-tracking” by prohibiting a mortgage servicer, trustee, mortgagee or beneficiary of a deed of trust from continuing the foreclosure process while an application for a foreclosure prevention alternative is pending or while the borrower is current on his or her obligation under a foreclosure prevention alternative.

  Section 14 of this bill requires a mortgage servicer to provide a single point of contact for a borrower who requests a foreclosure prevention alternative.

  Section 15 of this bill requires that under certain circumstances, a mortgage servicer, mortgagee or beneficiary of a deed of trust must dismiss a judicial foreclosure action or rescind a recorded notice  – 2 – – of default and election or notice of sale.

  Section 16 of this bill provides for certain civil remedies for a material violation of the provisions of sections 2-16.

  Section 16 also provides that a signatory to the consent judgment entered in the case entitled United States of America et al. v. Bank of America Corporation et al., who complies with the Settlement Term Sheet under that judgment is deemed to be in compliance with sections 2-16 and is not liable for a violation of those provisions.

  Section 16 further provides that if the consent judgment is modified or amended to permit compliance with the Final Servicing Rules issued by the federal Consumer Financial Protection Bureau to supersede the terms of the Settlement Term Sheet under the consent judgment: (1) a signatory to the consent judgment who complies with the modified or amended Settlement Term Sheet while the consent judgment is in effect is deemed to be in compliance with sections 2-16 and is not liable for a violation of those provisions; and (2) any mortgage servicer, mortgagee or beneficiary of the deed of trust who complies with the Final Servicing Rules is deemed to be in compliance with sections 2-16 and is not liable for a violation of those provisions.

  Section 18 of this bill provides that in a judicial foreclosure action concerning owner-occupied property, the mortgagor may elect to participate in the Foreclosure Mediation Program.

OTHER SHORT SALE POSTS

7 Tips for Short Sale

Addendum to Short Sale Listing 1.26.2010

Advance Fees Continued and the FTC 1.6.2011

Advance Fees – Short Sales – FTC II 5.4.2011

Charging for negotiating short sales/Negotiators 10.1.2010

Deficiency Judgments Nevada 4.27.2007

Foreclosure and the One Action Rule in Nevada 4.10.2007

HAMP the Federal Shortsale Program coming April 2010

Income Taxes & Foreclosures/Shortsales 12.21.2007

Income Taxes & Foreclosure/Short Sales 2013 Update

IRS PUBLICATIONS shortsales/foreclosures:

Ten Facts about Mortgage Debt Forgiveness

IRS publication on how 1099 taxes are calculated, exempt, etc.

IRS explanation as to taxes resulting from Foreclosure and Debt Cancellation.

Judicial Foreclosures (Short sales are looking more attractive..) 3.23.2012

Lender Short Sale Approval Addendum

Nevada Supreme Court Mandatory Mediation Program and How it Affects Shortsale

Nevada Short Sale Documents

Seller Being Released From Liability Language in Shortsale

Seller Liability After Short Sale 4.20.2007

Short Sale Advanced Fees

Short Sale Addendum to Purchase Agreement October 2010

Short Sales and Bankruptcy and Waiting Periods 10.5.2012

Short Sale Junior Lien/Senior Liens Rights To Sue & Other Changes

Short Sale Wallet Size Answer Sheet

Questions? email me darren@dwelshlaw.com

Nevada 4:34

UPDATE*** May 31, 2013

The foreclosure mediation process will soon be amended to INCLUDE judicial foreclosures.  It is within the new SB 321 (not yet signed by the Nevada Governor).  Section 18 of SB 321 provides that in a judicial foreclosure action concerning owner-occupied property, the mortgagor may elect to participate in the Foreclosure.

UPDATE*** May 31, 2013

 

The Nevada Foreclosure Mediation Program has been updated dramatically.  I first wrote about this on July 10 2009 under Mediation Option for Nevada Foreclosures.

The entire new rules effective December 6, 2012 can be found here at the Nevada Judiciary website.

Document Exchange – Likely the best change is that the documents exchanged between the Lender (Beneficiary) and the Homeowner are to be better organized and debated, discussed, etc., prior to the actual mediation.  This allows the mediation a better chance to more effective (successful) in potentially producing a loan modification, short sale, informed surrender of the home, etc.

Short Sales – The Short Sale section is also amended.  While the early exchange of documents is likely the best change so far to the rules, the Short Sale rules are also exciting. Short sales are exciting in general.  This may move to the level if spicy.  If the goal is a short sale, the homeowner may have a new helpful rule to succeed.  In § III(10) “REQUIRED MEDIATION DOCUMENTS”  it states in part

§(III)(10). The beneficiary of the deed of trust (lender)  shall …prepare an estimate of the ‘‘short sale’’ value of the residence that it may be willing to consider as a part of the negotiation, and shall submit any conditions that must be met in order for a short sale to be approved. The lender must also be able to negotiate the following:

(i) listing price,

(ii) date the property will be listed,

(iii) period of time the property will be marketed,

(iv) specified period lender has to determine whether to accept an offer, and

(v) maximum length of time escrow may last.

It continues …

(a) If the grantor (homeowner) fails to meet conditions within the period allowed by the conditions, the lender may submit a request to … issue a certificate to foreclose…”

But here is the exciting part:

(b) If the grantor (homeowner) believes that the lender failed to comply with the guidelines of the agreement for the sale, or that escrow did not close because lender’s action/inaction of trust, the homeowner may file a petition for judicial review pursuant to Rule 21.”

In other words…if there is an agreement to do a short sale at the mediation and the lender doesn’t follow the terms, a homeowner apparently can pull the lender into court and arrest a foreclosure and potentially force a short sale.

So a homeowner has a new incentive to get a commitment to shortsell at these Nevada Foreclosure Mediations.

See also

Foreclosure / Deficiency blog 4.27.2007

Income Taxes & Foreclosure/Short Sales 2013 Update 1.2.2013

Short Sales and Bankruptcy and Waiting Periods 10.5.2012

MERS and Foreclosure in Nevada 10.1.2012

Assembly Bill 149

Happy Birthday Webster The Nevada Supreme Court issued a ruling concerning MERS on Thursday September 27, 2012. Edelstein v. Bank Of New York Mellon, the Las Vegas Review Journal reported it was a “win” for the banks in foreclosure?

What does it mean?  The banks that relied on MERS are allowed to foreclose.  What is MERS?  See below.

  SHORT ANSWER  – MERS (Mortgage Electronic Registration System, Inc.), was confirmed as a proper player in the foreclosure process, and the assignments to and from MERS were upheld. The Court clarified however that the holder of the note and the holder of the deed must be the same. So, to say it is a win for the banks?  I guess you could look at it that way.  Mostly it clarified that at the time of foreclosure, the note holder (lender) and the deed holder (usually MERS) must be the same.  So MERS must assign the deed to the note holder (lender) for foreclosure to proceed.  In this case the note and deed were held by the foreclosing bank, so the Court allowed the foreclosure.

LONG ANSWER – It is obviously more complicated than that, Bank of New York Mellon’s trustee ReconTrust, BNY Mellon’s trustee, physically possessed the note a the time of the Nevada Supreme Court Mediation and used their servicer Bank of America as their representative in the Nevada Supreme Court Mediation Program.  But at the end of the day, the note and deed were held by the same bank and that bank was allowed to foreclose. So, a win for the banks? Not really, another way to look at it is that the banks must, yet again, clean up their paper work and hold both the note and deed at the time of foreclosure. This is not going to cause a landslide of foreclosures. It was not the impediment per se. It will make some mediations in the Nevada Supreme Court program perhaps go smoother.

What is this MERS you speak of centurion? MERS is often the holder of a deed of trust, and it is shown to that effect on the deed.  However, often the rights to the deed are transferred but not recorded at the county recorder. The Court explained MERS in a pretty succinct manner,

Typically, when a loan is originated, MERS is designated in the deed of trust as a nominee for the lender and the lender’s ‘successors and assigns,’ and as the deed’s ‘beneficiary’ which holds legal title to the security interest conveyed. If the lender sells or [transfers] the … [note] to another MERS member, the change is recorded only in the MERS database, not in county records, because MERS continues to [be the beneficiary of record] on the new lender’s behalf. So long as the sale of the note involves a MERS Member, … [t]he seller of the note does not and need not assign the [deed of trust] because under the terms of that security instrument, MERS remains the holder of title to the [deed of trust], that is, the mortgagee, as the nominee for the purchaser of the note, who is then the lender’s successor and/or assign. According to MERS, this system ‘saves lenders time and money, and reduces paperwork, by eliminating the need to prepare and record assignments when trading loans.

In Nevada to perform a non-judicial foreclosure on an owner-occupied residential property …(in other words not a judicial foreclosure NRS 40.430 nor a non-owner occupied foreclosure) the lender must meet certain requirements…

The Court confirmed that to enforce a foreclosure the deed and note must be held together by the same person/entity.  In this case MERS held the deed and note was held by a number of different lenders.  At the time of foreclosure MERS transferred the deed to the current note holder. The Court concluded, that the temporary separation (when one group held the deed and another held the note) was not irreparable or fatal to either the promissory note or the deed of trust. However, if they are not brought together, it prevents enforcement of the deed of trust through foreclosure. The two documents must ultimately be held by the same party.

The Court concluded that when MERS is the named beneficiary and a different entity holds the promissory note, the note and the deed of trust are split, making nonjudicial foreclosure by either improper. However, any split is cured when the promissory note and deed of trust are reunified. Because the foreclosing bank in this case became both the holder of the promissory note and the beneficiary of the deed of trust, proceeding to foreclosure was proper.

More importantly were the three cases before the Nevada Supreme Court this morning, addressing, statute of limitations on short sales, and junior liens and the right to sue borrowers as passed by the Nevada Legislature in 2011.

 Sandpointe Apartments., LLC vs. Dist. Ct. (CML-NV Sandpointe, LLC) Docket No. 59507

Nielsen vs. Dist. Ct. (Branch Banking and Trust Co.) Docket No. 59823

Lavi vs. Dist. Ct. (Branch Banking) Docket No. 58968.

These upcoming decisions will affect thousands of Nevadans that have been foreclosed upon or sold via a short sale.  I will let you know when I hear more.

Questions:  darren@dwelshlaw.com

Short Sales & Federal Loan Modification

HAMP – You have heard of “HAMP” (the Obama Administration’s Home Affordable Modification Program), the details of which canbe read by clicking HERE.  Also see the footnote on HAMP below[i]

HAFA – The HAMP program now has a supplement to address short sales.  The Supplemental Directive 09-09 provides guidance to lenders on the Home Affordable Foreclosure Alternatives Program (in other words short sales) which is known as “HAFA” and its details can be read by clicking HERE.

Effective Date – HAFA is effective April 5, 2010, (but participating lenders may elect to implement HAFA prior to this date)

General Terms: 

  • Help
    If your home owner would like to speak with a counselor about this program, call the Homeowner’s HOPE™ Hotline 1‐888‐995‐HOPE (4673). The Homeowner’s HOPE™ Hotline offers free HUD‐certified counseling services and is available 24/7 in English and Spanish. Other languages are available by appointment.
  • Short Sale Agreement
    The HAFA Short Sale Agreement or” SSA,” Exhibit A, pg. 16 of the Directive  outlines the roles and responsibilities of the servicer and borrower in the short sale listing process and provides key marketing terms, such as a list price or acceptable sale proceeds and the duration of the SSA.
  • Price   
    Allows the borrower to receive pre-approved short sale terms prior to the property being listing.
  • Commission  (Read Carefully)
    Commission is semi-protected.  The Seller cannot earn a commission, nor can a Buyer.  It does prohibit the reduction in the real estate commission agreed upon in the listing agreement, but also allows the Lender to “retain vendors to assist your listing broker with the sale, and this vendor must be paid ____% [or $____] from the commission.”  So ensure you look over the Short Sale Agreement between the Lender and the Seller to know what this cost is.  Supplemental Directive Page A-5.
  • Release of Liability
    Requires that borrowers be fully released from future liability for the debt.
  • Release of 2nd Deed Liability
    This section is called the “Investor Reimbursement for Subordinate Lien Releases,” and declares that lenders may pay up to a total of up to $3,000 in short-sale proceeds to subordinate lien holders (2nds), or allow payment of up to $3,000 to subordinate lien holders.  Subordinate lien holders that receive payment must release their liens and waive all future claims against the borrower.
  • Cash For Keys
    Borrower entitled to an incentive payment of $1,500 to assist with relocation expenses to be reported on the HUD-1 Settlement Statement.
  • Arms Length Transaction
    Home cannot be sold to anyone who is related to the home owner nor to anyone who has a close personal or business relationship with the homeowner.  Seller cannot get any portion of commission (even if home owner is licensed).
  • 90 Day NO Flip
    Any buyer of the home must agree to not sell the home within 90 calendar days of the date it is sold.

HAFA Consideration/Requirements

  • Lenders will create a written policy for when it will offer the HAFA program to borrowers.
  • Borrowers must first apply for HAMP prior to the short sale HAFA being offered.
  • The property must be borrower’s principal residence.
  • Loan must be originated on or before January 1, 2009.
  • The mortgage must be delinquent or default is reasonably foreseeable.
  • Unpaid principal balance may not be more than $729,750 (different for duplexes)
  • The borrower’s total monthly mortgage payment must exceed 31 percent of the borrower’s gross income.

Time Frames:

  • SSA Offer to home owner by Lender.
    Lender to consider borrower for HAFA within 30 calendar days of the date the borrower requests a short sale.  Lender to notify the borrower in writing of the availability of HAFA option and allow the borrower 14 calendar days from the date of the notification to contact the servicer by verbal or written communication and request consideration under HAFA.
  • Days to Close Escrow.
    Home owner has120 calendar days from the date of the offer of HAFA to home owner to close escrow on the short sale.
  • Response Time By Lender.
    Offers submitted at the list price to the Lender (with a letter that the buyer is approved for a mortgage loan) will be responded to within 10 business days of lender’s receipt, provided the these documents are within the terms and conditions of SSA (and any other liens are released) the Lender will approve the sale.

 What Should You Do?

  • Work with your Seller to get the bank’s written policy of HAFA for your client’s particular lender.
  • Work with the 2nd Mortgage (if it exists) to determine if they are on board with HAFA.
  • Gain the pre-approved short sale figure from the Lender.
  • Read the SSA that the lender will be providing borrower,  Exhibit A, pg. 16 of the Directive
  • Ensure the Addendum to Sort Sale dictates that the terms of the Lender within the SSA are agreed to by the Buyer as to the 90 day “no flip rule.”

 


[i] Home Affordable Modification Program: Overview  The Home Affordable Modification Program is designed to help as many as 3 to 4 million financially struggling homeowners avoid foreclosure by modifying loans to a level that is affordable for borrowers now and sustainable over the long term. The program provides clear and consistent loan modification guidelines that the entire mortgage industry can use.

Borrower eligibility is based on meeting specific criteria including:
1) borrower is delinquent on their mortgage or faces imminent risk of default
2) property is occupied as borrower’s primary residence
3) mortgage was originated on or before Jan. 1, 2009 and unpaid principal balance must be no greater than $729,750 for one-unit properties.

After determining a borrower’s eligibility, a servicer will take a series of steps to adjust the monthly mortgage payment to 31% of a borrower’s total pretax monthly income:

  • First, reduce the interest rate to as low as 2%,
  • Next, if necessary, extend the loan term to 40 years,
  • Finally, if necessary, forbear (defer) a portion of the principal until the loan is paid off and waive interest on the deferred amount.

Note: Servicers may elect to forgive principal under HAMP on a stand alone basis or before any modification step in order to achieve the target monthly mortgage payment.

The Home Affordable Modification Program includes incentives for borrowers, servicers and investors.

FORECLOSURE

NEVADA PERSONAL RESIDENCES

AS OF JULY 1, 2009

 

A follow up to the April 27, 2007 Foreclosure / Deficiency blog.

IMPORTANT FORMS

CREATING THE PROGRAM

Assembly Bill 149 was passed by the Nevada Legislature during the 2009 session and signed by Governor Jim Gibbons.  Its purpose is to address the foreclosure crisis head-on and to help keep Nevada families in their homes.

This law establishes a Foreclosure Mediation Program for owner-occupied residential properties that are subject to foreclosure notices – formally known as a Notice of Default and Election to Sell – filed on or after July 1, 2009.

WHAT IS MEDIATION?

Mediation is an alternative method to help parties resolve disputes by agreement with the help of trained mediators.  Mediating a foreclosure action has its advantages.  It is fast, inexpensive, and offers a flexibility that more formal processes do not.  Home foreclosures impact both the homeowner and the lender.  Homeowners do not want to lose their homes and mortgage lenders do not want to be in the real estate business.  Both sides may benefit through foreclosure mediations.

WHO IS ELIGIBLE?

The home must be your personal residence, be located in Nevada and you must occupy the property.  Timeshares are not covered, converted mobile homes are.

WHAT IF I AM TRYING TO SELL MY HOME IN A SHORT SALE?

The rules address this and require the Lender to bring to mediation an estimate of “short sale” value of the residence that it may be willing to consider as a part of the negotiation if loan modification is not agreed upon.  So it may be a good idea to participate to assist your Short Sale along.

WHY SHOULD YOU MEDIATE?

You can play a major role, with the help of a trained mediator, in deciding the outcome of your individual dilemma.  Mediation is a give-and-take process in which the parties work to reach a mutually acceptable resolution to a mutual problem.  Resolutions reached through foreclosure mediations are compromises that offer advantages to lenders as well as homeowners.

If you have the ability to meet the other party half way, everyone may benefit.

  • Can you, as a homeowner, make your mortgage payments if your home loan is modified?
  • Can you, as a lender in today’s real estate market, modify a loan to the extent that the homeowner can perform?

If the answers are YES, the Foreclosure Mediation Program may be able to save A Nevada home.

WHAT ARE MY DEADLINES?

The owner of the property (title holder) must, not later than 30 days after the service upon him or her of the notice of default deliver the Election/Waiver of Mediation Form and deliver the form the trustee, by certified mail, return receipt requested & you must mail a copy of the Election/Waiver of Mediation to the Administrator.

WHAT IF MY NOTICE OF DEFAULT WAS SERVICE PRIOR TO JULY 1 209?

You may only participate if the Lender agrees in writing, and you must provide the Administrator a copy of the agreement.  Example agreement located HERE. [attach].

WHAT DO YOU BRING TO MEDIATION?

Homeowners must bring:

  1. A Financial Statement and Housing Affordability Worksheet to include the information set forth in forms provided by the Administrator. (Form does not exist yet).
  2. Confidential nonbinding proposal for resolving the foreclosure.
  3. Perhaps You Should Bring?
    • Your own CMA, comparative price analysis, or a BPO , broker price opinion, from your Prudential, Americana Group, REALTOR® to indicate the current value of the home.
    • Proof you are involved in a short sale listing, if you are.

Lenders must bring:

  1. The original or certified copy of the deed of trust, the mortgage note, and each assignment of the deed of trust and the mortgage note.
  2. Most current and appropriate appraisals that it has.
  3. An estimate of “short sale” value of the residence that it may be willing to consider as a part of the negotiation if loan modification is not agreed upon.
  4. Confidential nonbinding proposal for resolving the foreclosure, including the evaluative methodology use in determining the eligibility or non-eligibility of loan modification.

Both parties can bring lawyers, friends, interpreters, relatives, to support you at the mediation.

WHAT ARE THE COSTS?

$200 for each ‘side.’  If you are married and own the home with your wife, it is still only $200 for your side.  Each party must pay $200 by certified check at the time the election to mediate is mailed in.

A lawyer is not required to be present with you in the mediation process, but each side is welcome to have an attorney represent them.  If you want an interpreter, you must pay for this on your own.

WHAT ARE TIME FRAMES:

Mediations are limited to four hours and require that mediations be conducted within 90 days of a foreclosure notice being filed.  Also all decision makers must be present for the mediations.  That means, if an agreement is reached, it can be finalized quickly.

AT THE CONCLUSION OF THE MEDIATION …

Within 10 days of the mediation, the mediator will prepare the necessary Statement of Agreement or Non-agreement and serve it on the parties.  The original will be filed with the Foreclosure Mediation Program Administrator and the mediation will be closed.  If there is an agreement, the parties will execute the appropriate documents.  If there is no agreement, the parties will be free to pursue other legal remedies.