Lenders to Provide Notice of Availability of Mediation Services in All New Milwaukee County Foreclosure Filings
Real Estate Alert 07/24/09 Kelly L. Turenne, Scott L. Langlois
Effective as of July 23, 2009, parties initiating foreclosure actions in Milwaukee County must attach, to the summons and complaint served upon the defendant/borrower, a notice announcing the availability of the Milwaukee Foreclosure Mediation Program (MFMP) and a mediation request form. The notice and request forms must be printed on pink paper. Copies of the approved forms required by the directive are available at the Clerk of Courts office and at http://law.marquette.edu/foreclosure/.
About the Program
The MFMP is a voluntary, court-based independent mediation option for lenders and borrowers. In most cases, successful mediation will serve as a venue to work out new loan terms, a short sale or other solution that is mutually agreeable and execute a final agreement between the parties. The MFMP is instituted by Marquette University Law School and housed at the Milwaukee County Courthouse.
To be eligible for foreclosure mediation services through the MFMP, the case must involve owner-occupied residential property with four units or less, and the property must be located in Milwaukee County. The program's Chief Mediator, a licensed attorney and experienced mediator, will conduct daily mediation sessions and work with other volunteer mediators to serve the parties in foreclosure requesting mediation services.
About the Process
Either the borrower or the lender may request mediation. For all filings on or after July 23, the mediation notice and request form must be attached to the summons and complaint. Borrowers must submit the mediation request within 15 days after being served with the summons. Borrowers whose foreclosure action was filed before July 23 may also request mediation and are encouraged to apply as early in the foreclosure process as possible. Lenders may request mediation services for any foreclosure case currently pending; at this time there is no limitation on the time period for lenders to apply. Borrower and lender request forms can be found at http://law.marquette.edu/foreclosure/.
Borrower requests will be screened to ensure there is some possibility of a successful outcome in a mediation process. If an application for mediation has been accepted, the MFMP program coordinator will send a letter to the opposing party, requesting their participation in mediation. Both the borrower and the lender must agree to mediation, and a $100 fee will be charged to each. Participation in the mediation program does not require postponement of the foreclosure action; both proceedings may take place simultaneously.
If both parties agree to participate in the program, a mediator will be assigned and a mediation hearing will be scheduled for 45-60 days after the initial request for mediation was received. Participating borrowers must meet with a MFMP-assigned housing counselor. The housing counselor will work with the borrower to analyze the borrower's current income and expenses, fill out a financial worksheet and determine the amount of monthly payments that the borrower can afford. The completed financial worksheet and potential settlement options will be sent to the assigned mediator and the lender for review prior the scheduled mediation session.
It is required that the lender have present at the mediation hearing a representative with full settlement authority. (The lender's representative may appear by telephone.) If a settlement is reached, the parties will enter into a final contract prescribing the terms of the agreement. Generally, the settlement agreement will be drafted by the lender.
The MFMP was created by the Foreclosure Mediation Task Force, a subset of the Milwaukee Foreclosure Partnership Initiative launched by Mayor Tom Barrett. The MFMP was started with seed money from the City of Milwaukee and funding contributed by Attorney General Van Hollen from the proceeds of the Countrywide Financial Corporation lawsuit. The program is designed to help citizens preserve housing assets, to return a steady mortgage payment to lenders and to relieve the court dockets.
Foreclosure mediation programs have been initiated in several jurisdictions, including Ohio, New York, Florida and the City of Philadelphia. These initiatives have reported a high success rate for facilitating settlement agreements, and more and more jurisdictions are turning to mediation as a solution for the sharp increase in foreclosure filings. For more details about the Milwaukee Foreclosure Mediation Program, or if you have questions, please contact Kelly L. Turenne at 414-277-5577 / Kelly.Turenne@quarles.com, Scott L. Langlois at 414-277-5619 / Scott.Langlois@quarles.com or your local Quarles & Brady attorney.