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New District measure requires six-months of mediation before foreclosure. | Business

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New District measure requires six-months of mediation before foreclosure.
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The District Council recently passed a measure that requires that mortgage lenders work with homeowners for six months through mediation before they will be able to foreclose on a home in the District. Mediation allows the borrower and the lender to negotiate with the guidance of a neutral third party possible alternatives to foreclosure.

What this means for struggling homeowners is that they now have an opportunity to work with their lender and possibly save their homes from the auction block. This is especially helpful in the District since there isn't a requirement that courts review foreclosure cases. In the District alone, there are more than 3,000 homes in the foreclosure process.

Maryland implemented a similar program that went into effect on July 1 requiring lenders to send borrowers a "Request for Mediation" form when it starts foreclosure proceedings in a Maryland court. The new program in the District will be managed by the District's Department of Insurance, Securities and Banking and the necessary forms can be downloaded from disb.dc.gov.

Business