In response to the ongoing foreclosure crisis in this country, many states have implemented mediation programs to assist borrowers in finding ways to avoid foreclosure. If you are a homeowner facing foreclosure in the District of Columbia, you may be eligible to participate in the district's foreclosure mediation program.
Read on to learn more about how the Washington D.C. mediation program works and how you may be able to benefit from the process.
Foreclosure mediation is a process that is used to help homeowners avoid foreclosure. Mediation consists of a face-to-face meeting between:
At the meeting, the parties discuss the borrower's financial situation and try to negotiate a way for the homeowner to keep the home or give up the property without going through a foreclosure. By working together, the parties are often able to reach an agreement.
Potential outcomes of foreclosure mediation include:
In 2010, Washington, D.C. established a program to provide certain homeowners in nonjudicial foreclosures with the right to mediation. (If a lender chooses to pursue a judicial foreclosure, it does not have to offer mediation. Learn more about judicial v. nonjudicial foreclosures.)
The program is open to owners of residential properties located in the District of Columbia if:
When you receive the NOD, you will also receive a mediation election form so you can opt in to the program.
You’ll also get:
You may elect to participate in mediation by submitting the following items to the mediation administrator (using the pre-addressed envelope provided along with the NOD) within 30 days after the date the NOD was mailed:
In addition, you must mail copies of the mediation form and the completed loss mitigation application to your lender in the other pre-addressed envelope that was provided along with the NOD.
If you choose to participate in the program, the mediation must take place within 45 days after the mailing of the NOD and conclude within 90 days, unless the parties agree to an extension of up to 30 days.
The lender cannot proceed with the foreclosure until the process is complete and the mediation administrator issues a certificate. However, if you fail to act in good faith in the mediation (for example, by not showing up to the meeting), the lender will be allowed to proceed with the foreclosure.
The foreclosure mediation statute can be found at D.C. Code § 42-815.02.
There have been some reports that Washington, D.C.’s foreclosure mediation program doesn’t effectively protect homeowners. However, even though taking part in the program does not guarantee that a foreclosure will be avoided, it doesn't hurt to participate. The lender may be more likely to agree to a nonforeclosure solution during mediation than if you approach it outside of the program. Or you might qualify for a loss mitigation option that you hadn’t previously considered.
For more information on the District of Columbia’s foreclosure mediation program, go to the District of Columbia’s “Information for Homeowners” Webpage.