Foreclosure Mediation
An Overview
History of Foreclosure Mediation
In Ohio
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March 2007 – Creation of Governor’s Foreclosure
Prevention Task Force
September 2007 – Task Force Report (seven
themes; 27 recommendations)
December 2007 – Chief Justice Thomas J. Moyer
proposes that courts manage the increasing
number of foreclosure cases filed in Ohio by
developing foreclosure mediation programs.
Theme: Improve Ohio’s Foreclosure Process
Recommendation: Encourage mediation and alternative dispute
resolution to maximize the early resolution of foreclosure
actions.
History…
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February 2008 – Supreme Court launches the
Foreclosure Mediation Program Model, the first of its
kind in the nation, designed for counties to modify
based on their local needs, resources, community
and stakeholders. The result – programs vary by
county.
2008- present – The Supreme Court Dispute
Resolution Section continues to work with local
courts to create and enhance mediation programs.
The Supreme Court is also working with other states
and federal court to assist them in achieving the
same outcome.
Major Reasons for Foreclosure
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Then - subprime loans
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Now
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Loss of income
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Employment
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Two income household becomes one
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Decrease in the number of hours (full to part-time)
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Domestic issues such as divorce
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Medical catastrophe
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Foreclosure Mediation
Process and Procedure
Ohio Revised Code (O.R.C.) Chapter 2710
Uniform Mediation Act (UMA)
 Supreme Court of Ohio Rules of
Superintendence for the Courts of Ohio Rule
16. Mediation
 Local Court Rule
 Standing Order
 Court Order
 Local Court Policy and Procedure
The rules of civil procedure are the same as any
other civil case.
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Foreclosure Mediation
Program Funding
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Filing fees
County Commissioners
Parties
Mediation Process
Core Values
1. Confidentiality (to the extent the parties agree
per the Uniform Mediation Act)
2. Party self-determination
3. Mediator neutrality
4. “Do no harm” – parties should not be worse off
then there were without mediation
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Mediation: The Basics
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“Mediation” means any process in which a mediator
facilitates communication and negotiation between
parties to assist them in reaching a voluntary
agreement regarding their dispute.
“Mediation communication”
“Mediator”
See O.R.C. 2710.01. Uniform Mediation Act. Definitions.
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Uniform Mediation Act (UMA)
Privilege and Confidentiality
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Privilege O.R.C. 2710.03
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Privilege against disclosure
Confidentiality O.R.C. 2710.07
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Mediation communications are confidential to the
extent agreed by the parties
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Mediation Key Points
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Goal: mutually acceptable agreement that is
commercially reasonable and sustainable
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Impartial – see O.R.C. 2710.08 (G).
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Appearance of impartiality/neutrality
Facilitative Style of Mediation
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Mediators guide the parties through a party selfdetermination process.
Mediators provide resource information.
Mediators are not advocates for either party.
Mediators do not give advice.
Mediation Key Points
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The Role of the Mediator
Facilitative Style of Mediation
Mediators guide the parties through a party selfdetermination process.
 Mediators provide resource information.
 Mediators are not advocates for either party.
 Mediators do not give advice.
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Mediation Key Points
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Success means… a commercially reasonable
and sustainable agreement has been reached.
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Includes keeping people in their home as well as
transition strategies when is not possible.
Some foreclosure cases need to be resolved through
litigation.
To date some counties are reporting that 62-77% of
cases referred to mediation are settling.
Mediation Key Points
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Preparation
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Information exchange BEFORE the mediation session
is important in order to reach an agreement.
If parties are prepared by having shared necessary
information/documents before the mediation, many
cases can be resolved with one session, which results
in the most efficient use and allocation of state and
local resources.
Best practice – send servicer/lender accurate and
complete financial information 14 days prior to the
mediation session.
Mediation Key Points
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Preparation continued…
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Documents that will most likely be requested:
 Questionnaire/forms providing basic information from
both parties
 Financial information worksheets including income and
expenses may also include but are not limited to:
Hardship letter, pay stubs, bank statements, tax return,
4506-T form
Best practice – authorize servicer/lender to pull homeowner
credit
 See Home Affordable Modification Program (HAMP) at
makinghomeaffordable.gov for requirements.
Mediation Key Points
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The rules of civil procedure are the same as any
other civil case.
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HUD Certified Housing Counseling
Organizations provide counselors that assist borrowers with
their overall budget, homeowner education, completion of
necessary documents and forms.
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Pre-mediation conference call
Necessary information and confirmation of attendance
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Agreement to Mediate
Detail extent of confidentiality – sample on the Dispute
Resolution Section Web site. Include 2nd mortgage
holder and other junior lien holder(s), if applicable.
Mediation Key Points
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Termination
The mediator may terminate the mediation. For
example, if the defendant is pro se and does not
appear to understand the agreement, the mediator
may give him/her resources for assistance and
reschedule the mediation so the goal of the mediation
is achieved.
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Balance
Both parties are offered the same opportunities. For
example, if the defendant is allowed the opportunity
to reschedule, the plaintiff would as well. Allowing
mediation to be rescheduled would be decided on a
case-by-case basis.
Mediation Key Points
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Timing
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It is recommended that foreclosure cases are scheduled for
mediation as soon as possible. As the case proceeds it
becomes more difficult to negotiate.
Cases have been mediated after default judgment, sheriff’s
sale and even confirmation of the sale, but appropriate
motions/documents must be filed with the court.
Mediation Key Points
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Participation
Foreclosure mediations can take place where the borrower
is present and the lender/servicer who has authority to
settle participates by phone and/or has local counsel
present in the mediation while they are present via the
telephone. This mitigates costs incurred by
lender/servicers that are commonly charged to the
borrower. It also benefits all parties and does not hinder
the probability of success when the lender/servicer
participates by phone. The key is that the individual
participating has authority to settle.
Mediation Key Points
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Necessity to Memorialize Agreements
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Oral agreements are extremely difficult to enforce since
mediation communications are privileged under the
Uniform Mediation.
One of the exceptions to the privilege includes agreements
signed by the parties.
See Foreclosure Mediation Summary Report on the
Supreme Court’s Web site at:
http://www.supremecourtofohio.gov/JCS/disputeResolution
/foreclosure/documents.asp
What To Expect During the
Mediation Process
1. Introduction
2. Parties inherent desire to shorten the process
3. Discussion of the value of an agreement to mediate
4. Description of the problem
5. Time to allow parties to tell their story
6. Management of emotions
7. Summarizing where necessary
8. Clarification of questions, alternatives, statements, etc.
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Alternatives
1. Seek to retain the home
2. Seek to relinquish (transition strategy) the
home
without residual liability
3. Seek recovery of damages or other relief
through litigation
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Alternatives Summary
Retention
Relinquishment/Transition
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Repayment/Reinstatement
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Forbearance
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Short sale
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Loan modification
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Deed in lieu of foreclosure
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Temporary rate reduction
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Temporary payment reduction
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Bankruptcy - Chapter 13,
sometimes 7
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Refinancing
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Short Payoff
Consent judgment (also called in
rem foreclosure)
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Cash for keys clause
Cash for keys clause
Chapter 7 or 13
Litigation
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Training
Basic Mediation - minimum of 12 hours
 Foreclosure Mediation - offered by the
Supreme Court – minimum of 4.5 hours
 Uniform Mediation Act – minimum of 2
hours
The Supreme Court has trained more than
1000 individuals in Foreclosure Mediation
including Michigan, Wisconsin, Kentucky,
Illinois, and Indiana.
Important: See local courts for their training
requirements.
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Ongoing Professional Development
Roundtables (both virtual and face-to-face) are
scheduled regularly to share best practices.
See Supreme Court of Ohio Dispute Resolution
Section Events Calendar for details at:
http://www.supremecourt.ohio.gov/JCS/disputeR
esolution/training/
Awareness - Marketing
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Foreclosure program process and procedures
vary by county, but the goal is the same.
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See “Ohio Foreclosure Mediation Contact
Information by County” on the Supreme Court of
Ohio Dispute Resolution Section Web site.
Save the Dream hotline, Save Our Homes
task forces, language in the summons, post
cards, flyers, brochures, word of mouth,
radio, television, newspaper, etc.
Message to Homeowners
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Open your mail.
Contact your mortgage lender/servicer as soon
as you receive notice from the court or when
you realize you will have trouble making your
payments.
Work with a HUD Certified Housing Counseling
Organization.
Don’t wait
Do NOT move out.
Beware of scams.
Need help? Ohio’s Save the Dream resources:
http://www.com.ohio.gov/SavetheDream/
1.888.404.4674.
Foreclosure Mediation in Ohio
Supreme Court Resources
In addition to resources cited and discussed throughout
the training, go to the Dispute Resolution Section’s
Web site at www.supremecourt.ohio.gov/foreclosure
for additional resources such as:
1. Court-connected Foreclosure Mediation Contact
Information To request mediation, individuals must
contact the local court where the foreclosure action
was filed. For contact information, click on “Ohio
Foreclosure Mediation Contact Information by County”
Supreme Court Resources
2. Mediators For a list of mediators who have
completed the Supreme Court recommended
training click on “Directory of Foreclosure
Mediators”
3. Housing Counselors For contact information,
click on “Ohio Housing Counselor Contact
Information by County”
4. For Foreclosure Mediation in Ohio: What You
Need to Know click on “Foreclosure Mediation
FAQ”
If you have questions or comments,
or want to share best practices about your
program, please contact:
Jacqueline C. Hagerott
Manager, Dispute Resolution Section
The Supreme Court of Ohio
Email: jacqueline.hagerott@sc.ohio.gov
Phone: 614.387.9420
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