Modeled after a successful program in Philadelphia, Delaware leaders officially launched the First State’s new mortgage mediation program.
Delaware has had a mortgage mediation program in place for a few years now, but that program was voluntary. Last year, state lawmakers took action to make the program mandatory for lenders prior to foreclosing on a homeowner.
Delaware Attorney General Beau Biden says this program will help homeowners open up dialogue with their lenders. “Homeowners should not have to fight to speak to their lender,” Biden said while officially launching the program at the West End Neighborhood House in Wilmington. “Both parties, borrowers and lenders, have strong interest in finding mutually agreeable terms and alternatives to foreclosure.”
The mediation meetings are mandatory for lenders, but the law doesn’t force borrowers to attend. Biden says he hopes residents facing foreclosure will not hide from their troubles, but will come forward and see that there can be a solution that will allow them to keep their homes. “The success of these programs lies largely in their high participation rates,” Biden said. Philadelphia’s mediation program had 70% participation rate, and Biden says 85% of participants in the program were able to still be in their homes 18 months later.
The new mediation program eliminates income restrictions that were a part of the voluntary program. It also gives homeowners more time to respond to a foreclosure complaint. Now, the foreclosure process is put on hold while the mediation processs is underway.
Homeowners who want to learn more about the mediation program can call the state’s mortgage hotline at 800-220-5724.
Last year, there were more than 5,000 foreclosures in the state.