What is mediation?
Mediation is an informal, voluntary process in which an impartial person, trained in facilitation and negotiation techniques, helps the parties reach a mutually acceptable resolution. Mediation is flexible and creative. The actual process varies from case to case depending largely on the parties' needs and the mediator's style. Usually, the parties meet to discuss the issues face-to-face. Occasionally, mediation is a process conducted by conference call or in writing. The mediator helps the discussions remain focused and productive. Then, the mediator may hold private caucuses with each party separately, and will carry messages, clarifications, questions, proposals, offers, and counter offers, back and forth between them. The mediator uses the private caucus and other techniques to facilitate the negotiation. Mediation is non-binding. The emphasis is on fashioning a solution satisfactory to all. However, if the parties cannot negotiate an acceptable settlement, they may still benefit from the process by narrowing the issues to be arbitrated or litigated.
How does it work in foreclosure cases?
Mediation is a process of guided negotiations. The mediator works with the parties to a mortgage, with or without attorneys, in a discussion of the problem they have. The talks are an effort to resolve the problem with the mortgage by mutual agreement before it reaches court, default judgment, or foreclosure sale. The mediator has no authority to make a decision. The mediator serves as a discussion leader to help the participants negotiate more efficiently, and, hopefully, reach an agreement sooner than they could on their own.
The mediator's role?
The mediator assists and guides the parties toward their own solution by helping them to define the important issues and understand each other's interests. The mediator focuses each side on the crucial factors necessary for settlement and on the consequences of not settling. The mediator does not decide the outcome of the case and cannot compel the parties to settle. The mediator can defuse hostile attitudes and remedy miscommunications. The mediator is a mirror of reality, who can help soften or eliminate extreme negotiating positions. Through the mediator, parties assess weaknesses in their own case and recognize potential strengths of the other side. The parties can more clearly view matters previously distorted by anger and emotion. Within the privacy of the caucus, mediators can help each party analyze the strengths and weaknesses of its complete case. Most significantly, the mediator can explore creative and innovative solutions that the parties, caught up in adversarial negotiations, might never contemplate.
Why should I bother to mediate my mortgage problem?
Many difficulties with mortgages, either before suit is filed (such as when a ARM reset is approaching or when a homeowner is slightly behind in payments) or while a foreclosure case is pending, can be resolved through reasonable discussions. An experienced mediator can help the parties find a creative solution that they may have overlooked. Because mortgage lenders don’t want to own houses, they are generally willing to talk with a borrower about reasonable, practical solutions to bring the mortgage current. Mediation, with the chance to talk privately with the mediator, has a better opportunity to reach a resolution than a possibly tense or difficult one-on-one negotiation. And some lenders are willing to pay 100% of the mediator’s fee.
What can a mediator tell a judge?
The mediator can only tell the court (if a case is already pending) whether or not the case settled. Discussions in mediation are generally not admissible at trial. Even if a lawsuit is filed after mediation fails to reach a settlement, the mediator is still subject to the obligation to disclose nothing about the mediation discussions.
Who is the mediator?
Steve Garrett and Associates, Inc. A mediator is an independent, trained neutral, who works like a diplomat to help people settle disputes.
What kind or resolutions are possible?
Resolutions can take the form of: obtaining agreement from the lender or mortgage holder to reinstate the mortgage by recasting the loan, agreeing to an informal or formal forbearance agreement, agreeing to an informal or formal loan extension, agreeing to a pre-foreclosure sale, agreeing to an informal or formal deed in lieu of payment, rescinding a current foreclosure action against borrower, or other legally binding financial agreement between borrower and the lender or mortgage holder.
When settlement is not reached?
If the parties cannot settle at the mediation, several things might happen. The parties or attorneys may agree to negotiate further later on, or the mediator can schedule a follow-up mediation. Or the case could ultimately go forward in court. There is no penalty or extra cost for using mediation beyond the mediator’s fee.
The mediation process moves very quickly and does not delay the ultimate resolution. Finally, by the end of a single day of mediation, the improved lines of communication often place the parties in a better position to settle the case at a later stage. Most parties express satisfaction with the mediation process even when they do not reach full settlement. During the mediation process the parties and their representatives gain a better understanding of their case.
How successful is mediation?
Historically, parties settle most business disputes submitted to mediation. Mediation experts attribute this to the parties' control over the process, costs, and outcome. The parties approach the process with confidence, leading to successful resolutions. Approximately 80 percent of the cases in the submitted to mediation settle within a few weeks to a few months of the parties' formal agreement to mediate. Mediation is valuable even when the parties do not reach full settlement. Sometimes parts of a dispute are resolved in mediation, leaving fewer or less extreme differences to be resolved in arbitration or litigation. Gaining agreement on collateral issues can translate into significant savings of time and money for everyone involved. The mediation process improves communications, narrows outstanding issues, defuses emotions, and defines areas of agreement. Through the mediation process, the parties and their representatives also learn where to focus their energies should arbitration or litigation become necessary. Therefore the parties' future dispute resolution efforts become more efficient.
Benefits of mediation
Control--Mediation belongs to the parties. The disputing parties control the process, scheduling, costs, and outcome of the dispute. Less Adversarial--The mediation process is informal. It is less confrontational than arbitration or litigation. Preserves Options--Parties can enter into mediation without jeopardizing their option to arbitrate or litigate. Swift Settlement--Most mediations are successfully concluded in a single day. Since mediation can be scheduled soon after a dispute arises, parties reach settlement much earlier than in arbitration or litigation. Many mediations conclude before a formal arbitration claim is filed. Lower Cost--Mediation usually entails lower legal and preparatory costs, there is minimal interruption of business or personal life, lost productivity is kept to a minimum, and the fees and expenses of mediation are modest.
Creative Solutions--Mediators help the parties craft creative solutions. Low Risk--Settlement potential is high. The case proceeds quickly. The cost is modest and there are benefits even if a settlement is not reached. Mediation--offers greater confidentiality than arbitration.
What is pre-suit mediation, and why is it beneficial?
Pre-suit mediation is any mediation conference that occurs before a suit is filed in court. In effect, a legal problem is nipped in the bud before it becomes a lawsuit. Once a case is filed, the existence of that litigation is public record and any individual can look at the court’s case file or online records, and learn important information about the parties. Credit reporting services monitor court records and note the filing of a foreclosure suit as a black mark on an individual’s credit rating. Mediating pre-suit avoids the existence of a public record, saves everyone the expense of hiring attorneys, and solves a problem (such as being somewhat behind on a mortgage) before the passage of time makes the problem much worst.
How is mediation different from a “debt relief” service?
Many debt relief services are actually scams where the “service” charges you a hefty monthly fee, but provides little or nothing in return. No “debt relief service” is going to pay your mortgage for you or reduce your monthly payments. However, the mediation of a foreclosure problem gives everyone, the lender and the borrower, the chance to talk candidly and openly about the current problem with the mortgage, and look for a long-term solution that satisfies everyone. Perhaps the loan can be extended, the interest rate amended by agreement, or a homeowner given more time to catch up on overdue payments. A mediation leads to an agreement that both sides find fair and workable going forward. The mediator charges only for the hours worked toward that solution.
Will the mediator issue a decision in my case?
No. All the mediator can do is help the parties and attorneys look at the dispute more objectively, discuss various options for a workout of the mortgage, listen to each side privately, and assist the participants in finding a mutually acceptable solution. A mediator makes no decision, judgment, or recommendation on the outcome of the mortgage dispute.
Should I bring witnesses and exhibits to the mediation?
No. A mediation is not like a trial or arbitration. While the attorneys, parties, and the mediator will discuss the situation, there are no witnesses, no testimony, no exhibits, no objections, no cross examination, and no arguments. You may bring documents that relate to and explain the situation surrounding your mortgage and your financial circumstances.
Can I bring my attorney to the mediation?
Yes. Under the Uniform Mediation Act, a party in mediation can bring their attorney or any other support person that they want to the conference.
Will I be expected to testify?
No. Because mediation is a focused negotiation process, the mediator uses a conference room, but everyone sits at the table as equals in a discussion format. There is no witness stand and no testimony. You will be expected to listen, participate in the discussions as appropriate, and make decisions about how to negotiate, and whether or not to settle.
Can the mediator tell me how to handle my case?
No. The mediator is not there as a judge, jury, or arbitrator of the case, or as an advocate or advisor for either side. It is important that you analyze and reasonably evaluate your own financial situation and the benefits of working out possible new terms for a mortgage. The mediator may point out certain problems to each side, but this is just part of looking at the case objectively. The mediator, the attorneys, and the parties will also discuss the costs and drawbacks of going forward with foreclosure litigation as compared to the benefits of settlement.
Will the other side be there?
Generally yes. A representative of the mortgage lender, with authority to settle, and the current property owner(s) should be at the conference and prepared to negotiate. During the course of the mediation, the mediator can and usually will meet separately with each side for private, more candid discussions.
What if I just want to give up the house and walk away?
Giving up your house in the face of a foreclosure case is a serious decision and one that should not be made lightly. Returning the ownership of a mortgaged property to the lender is called “a deed in lieu of foreclosure”. The parties to a foreclosure can still mediate about such issues as when is the house to be turned over, when does the family have to move out, and what other money obligations can be negotiated as part of the deed in lieu of foreclosure.
I want my day in court. Why should I settle?
Every citizen has a right to seek a fair hearing in court, but you should consider that a trial is not the only legal choice available. Foreclosure cases rarely, if ever, go to trial. Almost always, the judge decides a foreclosure case based on written motions filed by the lender with the court. Each side should thoroughly discuss every factor in the current situation before making the important choice to settle with new terms or go to a foreclosure proceeding. Mediation is an opportunity for both sides of a case to explore settlement possibilities without risk or penalty, and with the aid of a trained mediator.