Recently, as part of my role as a mediator in the Maine court system, I was selected to serve as a mediator in the new Foreclosure Diversion Project.
A substantial increase in the filing of foreclosures in residential real estate has occurred in Maine, as it has in the rest of the country. Families are losing their homes, lenders are losing their investments, and there are a greater number of abandoned and neglected properties. Maine's Legislature has responded to this crisis with amendments in the foreclosure law. These amendments have the goals of reducing the amount of foreclosures, giving homeowners an opportunity to stay in their homes and pay their mortgages, and stabilizing the housing economy.
A key component of the new law is mediation. For all foreclosures filed after January 1, 2010, against the owner of an owner-occupied dwelling with less than four units, mediation is mandated. The required mediation will allow the parties to communicate directly with each other, with the assistance of a mediator, to see if there is a settlement which might result in the homeowner keeping the home and paying the loan or a modified version of the loan.
I look forward to writing future posts on this subject after the foreclosure diversion project has had some experience, and we can all see whether the new law is helping.