But even with mediation, the path to a solution isn’t easy.
“Even people working with this on a daily basis sometimes come in thinking mediation will bring about a magical transformation in the lender, but it doesn’t,” says Jessica Smith-Harper of Mid-Shore Pro Bono, a legal services counseling agency on the Eastern Shore. “But, in the end – in almost every case – a decision is eventually made that is favorable to the homeowner. Even if it’s not exactly what they hoped for, in almost every case the result is close enough for the homeowner to be able to regroup financially and move forward. They just have to stick with it and be persistent.”
For example, a young couple in Hurlock, Md. fell behind in their mortgage after the husband took a significant pay cut in 2011. They were able to struggle along, and had almost brought their loan current when the husband was seriously injured in an accident. As his wife struggled to support the family of five on one income while attending school, the family fell further and further behind. When the husband was able to resume work, they were seriously delinquent on their loan, but eager to find a way to bring the account up-to-date.
For months, the family tried negotiating with their lender by themselves. But they found what housing counselors say many families find – the lenders don’t return phone calls; they are unwilling to explore alternatives; frequent turnover among loan officers makes it difficult for families to know who they are dealing with and where they are in the process. Meanwhile, many lenders seemingly put the foreclosure process on automatic pilot, so that the process moves forward without regard to what a loan officer may say.
Frustrated, the family finally turned to Mid-Shore Pro Bono for help.
Volunteer attorneys Dick Tettelbaum and Elizabeth Tong worked with the homeowners to create a plan for mediation. They attended mediation with the couple and advocated for them throughout the process. True to form, the lender’s representative arrived at mediation unprepared and the hearing had to be rescheduled. But in the end, the homeowners reached an agreement that worked for them.
“People don’t understand what it can mean to them, to have a professional advocate working for them. It can make all the difference in the world,” Smith-Harper says.