NJ Mediation Program Over?

Posted by kevin on February 6, 2013 under Foreclosure Blog | Comments are off for this article

NJ set up a mediation program for residential property in foreclosure. To qualify, the property must be owner occupied, and a foreclosure complaint must have been filed already. According to the judges who run the foreclosure bench-bar conferences, about 40% of cases in mediation reach some form of resolution. What “some form of resolution” is, I am not exactly clear. I know that I have not received any permanent modifications through the mediation process.

That being said, mediation does have some good points. First, the servicer has to appear (telephonically but that’s better than nothing) at each hearing. So, you have a live body on the other end of the phone who has read your submission most of the time. Second, the mediation process takes time, and time is the ally of the homeower.

Now, that does not mean that it is not frustrating. You submit papers, get no feedback, and then on the day of the mediation, you are told that the documents are “stale”, or some documents are missing, or that no decision has been made. Mediators try to make the servicers move the case, but the mediators really have no muscle. The only person who can effectively get the attention of the servicer to expedite the process and make meaningful offers is the judge. However, judges have been reluctant to step into that role. (Perhaps they are too overburdened with their court calendars.)

Rumors have been swirling around the last few months that the mediation program will be cut or discontinued because of a lack of funding. At the bench-bar conference last week, it was announced that the mediation program will end in the beginning of March, 2013 unless the Chief Justice can come up with additional funding. Of course, the CJ does not have the ability to print money, so he is looking to the Governor for money. I have not heard anything from the governor’s office on this.

There has been some talk about lawyers running the mediation on a pro bono (free) basis. Frankly, I do not see any attorney doing more than 1-2 cases on a pro bono basis. Moreover, I do not see many HUD counselors working for nothing either.

Stay tuned. This may get intersting.