Alternative-Dispute-Resolution Practices Utilized to Aide Homeowners and Prevent ForeclosureThe City of Philadelphia and the state of New Jersey are utilizing new programs aimed at reducing the growing number of mortgage foreclosures. Through new telephone hotlines, qualifying homeowners are offered assistance to work toward mutually beneficial solutions for both lenders and homeowners. Ian Phillips, legislative director of the Association of Community Organizations for Reform Now, the largest grassroots community organization in the United States composed of low- and moderate-income individuals, stated, “lenders lose a lot of money on foreclosure, the homeowners lose, and all the people who live around that vacant property lose."1 The popularity of these alternative-dispute-resolution programs has surpassed expectations with the hotlines receiving significantly more inquiries than anticipated.
Philadelphia’s Residential Mortgage Foreclosure Diversion Pilot Program utilizes specifically trained, court-appointed conciliators to resolve foreclosure issues before the properties are transferred for sheriff sale. Conciliators work to address issues such as employment, income, expenses, eligibility for established housing “work-out” programs, and other pertinent matters. U.S. Senator Arlen Specter (R-Pa.) applauded the program for “help[ing] borrowers and lenders while preventing the proliferation of abandoned homes and keeping city property taxes flowing.2
New Jersey Governor John Corzine explained, “The magnitude of the foreclosure crisis has made many New Jerseyans feel that maintaining their dream of home ownership is beyond their control….It shouldn’t be."3 To assist homeowners and lenders, New Jersey created a free alternative-dispute-resolution program that offers mediation services to qualified homeowners and lenders. The program seeks to reach workable solutions for individuals to remain in their homes under special renting or temporarily reduced payment plans. Thousand of lawyers, mediators, and housing counselors have been specifically trained in order to serve as volunteers for this program.
Alternative-dispute-resolution practices are resolving the mortgage foreclosure crisis without court intervention or property loss. The response to the programs by housing advocates as well as homeowners has been positive, and has resulted in homeowners from Pennsylvania lobbying for statewide adoption of Philadelphia’s pilot program.1John-Hall, Annette. “A Step Against Foreclosures.” Philadelphia Inquirer. 19 September 2008.
2Brennan, Chris. “Pols Praise Mortgage Program.” Philadelphia Daily News. 25 October 2008.
3Lu, Adrienne. “New Jersey Offers Programs to Forestall Foreclosure.” Inquirer Trenton
Bureau. 10 January 2009.
Sources:
Brennan, Chris. “Pols Praise Mortgage Program.” Philadelphia Daily News. 25 October 2008. www.philly.com.
John-Hall, Annette. “A Step Against Foreclosures.” Philadelphia Inquirer. 19 September 2008. www.philly.com.
“Joint General Court Regulation No. 2008-01: Residential Mortgage Foreclosure Diversion Pilot Program.” First Judicial District of Philadelphia, Court of Common Pleas of Philadelphia County. 16 April 2008.
Lu, Adrienne. “Keeping Houses, Owners Together.” Inquirer Trenton Bureau. 23 January 2009. www.philly.com.
Lu, Adrienne. “New Jersey Offers Programs to Forestall Foreclosure.” Inquirer Trenton Bureau. 10 January 2009. www.philly.com.
“Residential Foreclosure Mediation Resources for ADR Professionals.” American Bar Association. 30 January 2009. www.abanet.org.
