No one buys a home with the intention of losing it to foreclosure. And if you think your lender is about to foreclose, it’s easy to make the mistake of thinking you have no power in the situation. However, you almost always have options — and one of those options is foreclosure mediation. If you’re wondering “What is foreclosure mediation?” and whether it can help you, here’s a closer look.
Few life events are as stressful as the possibility of losing your home to foreclosure. It’s easy to feel overwhelmed and discouraged in this situation, but don’t give up! Foreclosure mediation may be able to help you and your lender come to an agreement without going through with the foreclosure itself.
What Is Foreclosure Mediation?
Work With Your Lender to Negotiate a Solution
Foreclosure mediation is a process where a trained, neutral third party (called a mediator) sits down with you and your lender to help guide you toward a solution. However, the mediator’s role is purely to facilitate and guide discussion. They are not allowed to push either you or your lender toward any particular resolution. They may not offer advice to either side, and they have no authority to make decisions.
Eligibility for Foreclosure Mediation in Ohio
In Ohio, foreclosure mediation is handled by the courts, and the state’s Foreclosure Mediation Program Model was the first one in the United States. If you want to pursue foreclosure mediation, you must send a formal request to your county’s court within 28 days of receiving the initial summons. The court is not obligated to approve your request, but if it believes mediation has a high likelihood of leading to a positive outcome, it likely will.
Whether your request will be approved depends on your intentions. If your goal is to keep your home, the court will usually approve mediation requests only if you have at least enough income to meet your current monthly expenses. If you’re not interested in keeping your home, the court may approve you for mediation regardless of your income.
The Foreclosure Mediation Process
While the process of foreclosure mediation is not extremely complex, you will need to assemble detailed documentation before meeting with the mediator. Here’s how the process works.
1. You Submit a Request to the Court
Within 28 days of receiving a summons for foreclosure, you must file an answer. If you are interested in foreclosure mediation, you will need to send a Request for Foreclosure Mediation form to the court’s mediation department.
2. The Court Contacts the Lender
The court will send a standardized questionnaire to the lender to gather more information on your case.
3. The Court Makes a Decision
Once the mediation department has had the chance to review input from you and your lender, it will contact all involved parties to tell them whether it will mediate the case or not. If it agrees to the mediation, the court will schedule a mediation session.
If you’re facing the prospect of foreclosure, you might have more options than you think. Our bankruptcy attorneys can help you understand your situation and options. Call 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) to request a consultation today.
4. You Gather Relevant Information
Usually, the mediation department will send you an intake form, financial worksheets, and any other necessary documents to ensure all parties will have access to relevant information before the session. In some cases, the mediation department may meet with you and the lender separately before the scheduled session.
5. You Attend the Session
The session usually lasts an hour or two, and the mediator will guide the discussion. However, they may not offer advice to you or the lender or make any decisions for you. Therefore, if you have any questions you would want to hire an attorney who handles mediation.
6. You Reach an Outcome
If you and the lender come to an agreement, that agreement will be filed with the mediation department. If you are unable to reach an agreement, the foreclosure case will continue in court.
Benefits of Foreclosure Mediation
While foreclosure mediation may not be right for every case, it comes with many benefits for both you and the lender, including:
- It saves you the stress and expense of the foreclosure process.
- It may be able to help you keep your home.
- If you can’t keep your home, you may be able to minimize credit damage.
- It allows you to create customized solutions.
- It saves considerable time.
Foreclosure mediation may not be your only option if your home is at risk for foreclosure. Your legal team can assess your case and help you select the path forward that best meets your needs.
Potential Outcomes of Foreclosure Mediation
You May Be Able to Avoid Foreclosure Altogether
Participating in mediation doesn’t guarantee that you and the lender will reach an agreement. However, in many cases, mediation is resolved with one of these solutions:
- Modifying your loan terms to make repayment easier
- Creating a forbearance plan while you work to improve your financial situation
- Deed-in-lieu of foreclosure (you give the lender the deed to the home)
- Deferring some costs to the end of the mortgage
- Arranging a short sale
- Creating a schedule to help you catch up on missed payments
It’s important to have realistic expectations before going into the process. You may not be able to keep your home if you can’t demonstrate your ability to adhere to the terms of a new payment agreement. However, if you do have to lose your home, options like short sales cause considerably less credit damage than foreclosure.
When Foreclosure Mediation Doesn’t Work Out
If you are facing insurmountable debt and foreclosure mediation is not an option for you or doesn’t work out, bankruptcy may be an option. Filing a bankruptcy can stop a foreclosure, but you have to act quickly to get it filed in enough time to be able to stop the foreclosure.
If you’re facing foreclosure and considering bankruptcy, our attorneys can go over all possible options with you Call Fesenmyer Cousino Weinzimmer at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) today.
