What Is Foreclosure Mediation?

Some states, certain counties, cities, and even some courts offer foreclosure mediation programs to homeowners. These mediation programs bring the borrower and lender together to work out a way to avoid foreclosure.

While a particular outcome isn't guaranteed if you decide to participate in mediation, you might be able to work out a foreclosure alternative, like a loan modification, or at least get some more time to live in the home (payment-free).

How Mediation Can Stop a Foreclosure

"Foreclosure mediation" is a process that can help homeowners keep their homes after falling behind in their mortgage payments. In foreclosure mediation, the homeowner and foreclosing lender (or loan servicer) meet with an impartial facilitator (the mediator) to discuss the borrower's financial situation and explore options to avoid a foreclosure.

The potential outcomes of mediation typically include:

• reinstating the mortgage loan
• restructuring the loan with, for example, a loan modification
• a forbearance
• a repayment agreement, or
• liquidating the property with a sale, short sale, or deed in lieu of foreclosure.

Or you might qualify for another option, such as a payment deferral. With a payment deferral, defers repayment of the skipped amounts until the home loan ends.

Foreclosure Mediation Process Step-by-Step

If you live in one of the states, counties, or cities that offer a foreclosure mediation program, your lender must follow the program guidelines. The mediation process varies from program to program, but the process usually begins when the lender initiates a foreclosure under state law.

Along with a notice of foreclosure, homeowners typically get:

• a notice about the mediation program
• information about how to opt into the mediation program if enrollment isn't automatic, and
• contact information for HUD-approved housing counselors and low-cost legal services available in the state.

Generally, if the borrower fails to respond to the mediation notice, the lender may proceed with the foreclosure. However, if mediation is elected or required, a representative for the lender must attend the mediation, along with the borrower, and the mediator. Borrowers have the right to be represented by an attorney or, in some cases, a housing counselor.

In most cases, if the lender and the borrowers agree at the mediation to enter into a foreclosure prevention agreement, the agreement must be put in writing and signed by both parties, with each party retaining a copy. The foreclosure will then be dismissed or postponed so long as the borrowers comply with the terms of the agreement. But if the lender and borrower are unable to reach an agreement, the foreclosure action may proceed.

Often, the foreclosure process stops while mediation is ongoing. But in some places, if the homeowner wants to pause the foreclosure, they must officially request a stay (postponement) by filing a motion or taking some other required action. Again, the details of each program (who pays fees, how the process works, who must attend, whether foreclosure stops, etc.) vary widely by state and locality.

Cost and Timeline of Mediation

In some states, the state government budget covers the costs associated with a foreclosure mediation program. Other states add supplemental charges to the filing fee lenders must pay when starting a foreclosure, which covers the program's costs.

A few mediation programs require the homeowner to pay part of the mediation costs. But free or low-cost mediation is usually available for borrowers who can't afford the fees.

You don't have to participate in mediation, but you might be able to prolong the foreclosure process if you do. Again, in many cases, a foreclosure stops while the mediation process is ongoing.

Who Is Eligible for Foreclosure Mediation?

Foreclosure mediation programs might be available whether you're facing a judicial or nonjudicial foreclosure. Generally, most foreclosure mediation programs permit the homeowner to participate if they're behind in mortgage payments and facing foreclosure. Usually, the home being foreclosed must be a one- to four-unit property, occupied by the borrower as a principal residence. Foreclosure mediation usually isn't available for second homes or investment properties.

However, eligibility requirements vary from program to program. And you might also have to meet other criteria such as getting a recommendation from a housing counselor or an attorney for mediation. In some cases, you might not be eligible to participate if you've surrendered the property or are in active bankruptcy.

In some places, foreclosure mediation is mandatory. Others require the lender to participate at the homeowner's option.

State-by-State Foreclosure Mediation Programs

There are statewide mediation programs in some places, while in others, foreclosure mediation programs are available only in specific counties or cities. Other places don't offer foreclosure mediation at all. However, courts can order mediation.

Foreclosure laws in Connecticut, Delaware, Hawaii, Indiana, Maine, Maryland, Nevada, New York, Oregon, Rhode Island, Vermont, and Washington set up statewide mediation programs. The District of Columbia also has a mediation program.

Ohio and New Jersey (N.J. Stat. § 2A:50-75 (2025)) allow local courts to implement foreclosure mediation programs. These programs often vary. For example, while almost all counties in Ohio have some form of mediation available to homeowners facing foreclosure, the programs have minor differences because local courts may modify the mediation model.

California doesn't have a statewide foreclosure mediation program, but state law gives homeowners the opportunity to request a meeting to explore ways to avoid foreclosure. However, it is unsupervised. (Cal. Civ. Code § 2923.5 (2025).)) Florida used to have a statewide foreclosure mediation, that program was discontinued. However, courts can still refer individual foreclosure cases to mediation.

Again, certain counties, cities, and courts also have mediation programs. Some counties, such as ones in Illinois, Kentucky (under the Kentucky Rules of Civil Procedure, Rule 16), New Mexico, Pennsylvania, and Wisconsin, offer mediation opportunities. To learn if a foreclosure mediation program is available in your area, contact the court administrator's office or visit the local court's website (judicial foreclosures), or talk to a lawyer or housing counselor. Also, bankruptcy courts sometimes use mediation programs to deal with foreclosures.

Is Foreclosure Mediation Typically Successful?

A few states have a law specifically requiring lenders and servicers to negotiate in good faith with homeowners about foreclosure alternatives before proceeding with a foreclosure sale. But in most places, state law doesn't require the lender or servicer to negotiate in good faith. However, courts generally have the authority to require the parties to a foreclosure to sincerely negotiate during foreclosure mediation.

So, if required to negotiate in good faith, the lender's representative generally must not do any of the following:

• say that they never received a homeowner's loss mitigation documents when they did
• repeatedly change the reason for a loan modification denial,or
• say that a loan modification was denied because of investor guidelines if no such guidelines exist.

Still, even if good-faith negotiations are required, foreclosure mediation programs don't force the lender to provide borrowers with a way to avoid foreclosure. This means borrowers might finish the mediation and still end up losing the home to foreclosure.

But one study showed that homeowners who participate in mediation are 1.7 times more likely to avoid foreclosure than those who don't. The process is more successful in some programs than others.

The bottom line is that while attending foreclosure mediation doesn't ensure that you'll be able to avoid losing your home to a foreclosure, it might increase your chances of working something out.

Alternatives to Mediation

Borrowers may work with their loan servicer directly to try to find a way to avoid foreclosure in a process called "loss mitigation," whether foreclosure mediation is available or not. In most cases, federal law requires servicers to contact borrowers behind in their payments to inform them about loss mitigation options.

State law might set out loss mitigation requirements, too.

Loss Mitigation Programs vs. Foreclosure Mediation

"Loss mitigation" refers to the collaborative process between a borrower and their loan servicer aimed at preventing foreclosure. Its main goal is to minimize financial losses for the mortgage investor (the lender or company that owns the loan) when a borrower can't keep up with their mortgage payments.

While loss mitigation primarily protects the investor from having to conduct a foreclosure, it also offers potential mortgage relief to the borrower. Certain loss mitigation options, like a loan modification, forbearance agreement, and repayment plan, allow the borrower to keep their home. Other alternatives, such as a short sale or deed in lieu of foreclosure, permit the borrower to give up the property without going through a foreclosure.

Similarities Between Foreclosure Mediation and Loss Mitigation

In loss mitigation and foreclosure mediation, the borrower works with the lender (who is typically represented by a loan servicer) to try to prevent a foreclosure. The borrower typically must provide financial documentation, such as paystubs and bank statements, to the servicer. In mediation, these documents might have to be provided to other parties, such as the court or the mediator.

Ultimately, the goal of both loss mitigation and foreclosure mediation is to help the borrower avoid foreclosure.

Differences Between Foreclosure Mediation and Loss Mitigation Programs

In loss mitigation, the borrower deals with just the lender (again, through the loan servicer). Federal foreclosure laws and some state foreclosure laws require the servicer to designate a single person (or team) with full settlement authority to participate in the negotiations.

Mediation, however, has the benefit of having the negotiations monitored by a third party whose sole job is to attempt to facilitate a resolution. The mediator can make suggestions that might not otherwise be considered and assist the parties in evaluating options without the pressure of being a party to the dispute.

Get More Information About Foreclosure Relief Options and Foreclosure Laws

For additional information on federal mortgage servicing laws and foreclosure relief options, go to the Consumer Financial Protection Bureau (CFPB) website.

Getting Help Dealing With Foreclosure

Even though participating in foreclosure mediation might not ultimately help you avoid a foreclosure, it doesn't hurt to attend the meeting (if available). The lender could be more likely to agree to a nonforeclosure solution, or you might qualify for a loss mitigation option you hadn't previously considered. Or you might buy yourself some extra time to remain in the home.

Foreclosure mediators are typically trained in mediation, as well as federal and state foreclosure laws, and also usually know about different community-based resources and mortgage assistance programs that could be available to help homeowners facing foreclosure. But they don't represent either party in the mediation process, and they can't give legal advice.

So, while you don't have to hire a lawyer to represent you in your foreclosure mediation, it's often a good idea. A lawyer can give you legal advice specific to your situation and advocate on your behalf, helping you negotiate a way to avoid foreclosure. A lawyer will also ensure that your legal rights are protected in the process. And, if you're thinking about filing a response to the foreclosure, or any other motion with a court, consider talking to an attorney beforehand to discuss the consequences of doing so and your various options.

It's also a good idea to talk to a HUD-approved housing counselor. A housing counselor can also provide information (at no cost) about loss mitigation options and foreclosure avoidance programs in your area. You can find a housing counselor by filling out the online form on the U.S. Department of Housing and Urban Development website.