In March, I reported on a package of ten bills being considered by the New Jersey legislature that would reform the state’s residential mortgage foreclosure process. The bills were built on recommendations from a Special Committee on Residential Foreclosures that examined the state’s foreclosure practices, policies, court rules and legislation and made suggestions for improvement. Since March, a handful of the original ten bills underwent slight modifications and currently, one of the initial bills is still under consideration. At the end of April, New Jersey Governor Phil Murphy signed a modified nine-bill package into law. Notably, one of the bills in the package codifies and makes permanent the state’s Foreclosure Mediation Program. Additional information about the other bills in the package can be found here.
Archive for the ‘Foreclosure Mediation’ Category
Despite employing a number of practices in response to the mortgage crisis in 2008, New Jersey has had one of the highest foreclosure rates among all states since 2015. In a continued effort to address this issue, New Jersey Chief Justice Stuart Rabner established a Special Committee on Residential Foreclosures in 2017 to review current practices, policies, court rules and legislation and develop suggestions for reform. Last year, the Committee released its report, which summarizes the history and current state of foreclosure in New Jersey and includes recommendations for reform. Towards the end of their report, the Committee notes that not only do unresolved foreclosures lead to thousands of cases remaining on court dockets, but they also depress property values, burden municipalities and reduce tax revenues.
Building on the recommendations from the Committee, the New Jersey legislature is currently considering a ten-bill package that would reform the residential mortgage foreclosure process. Introduced at the end of January, this package of ten bills seeks to expedite the foreclosure process, decrease the amount of time foreclosed properties remain on the market, and make the foreclosure mediation program permanent. The following chart summaries each bill being considered.
|Recommends revising the Fair Foreclosure Act (“FFA”) to require that notices of intention to foreclose are filed at least 30 days (but no more than 180 days) before foreclosure commences. Additionally, the bill also requires that these notices also include a notice to homeowners that they are entitled to housing counseling through the Foreclosure Mediation Program.|
|Requires the Department of Community Affairs to create a database with an interactive map that details the foreclosed properties in the state. To fund this database, this bill also establishes a $30 fee that would be collected when deeds are recorded.|
|Modifies the foreclosure process to expand the definition of what constitutes a vacant and abandoned property and requires that sales of foreclosed properties occur within 60 days of a foreclosure judgment.|
|Allows all common interest community associations to record liens for unpaid assessments.|
|Requires creditors and their in-state agents to file their contact information with the Superior Court.|
|Clarifies that the New Jersey Residential Mortgage Lending Act also applies to any out-of-state person involved in residential mortgage lending in the state.|
|Requires anyone acting as a mortgage servicer to obtain a license from the state Department of Baking and Insurance.|
|Reduces the statute of limitations for residential mortgage foreclosure actions under the FFA from 20 years to six years from the date on which the homeowner defaulted.|
|Focuses on expediting residential mortgage foreclosure proceedings. Under this bill, sheriffs would be required to conduct foreclosure sales within 120 days of receiving orders to foreclose.|
|Codifies the Foreclosure Mediation Program and makes several adjustments to the program. These changes include notifying homeowners about the program when they receive their intent to foreclose and again when a mortgage foreclosure complaint has been filed against a property. The bill also requires that these written notices must be available in both English and Spanish.|
Although these bills have several more hurdles to pass before becoming law, their introduction indicates cooperation among the executive, legislative and judicial branches during the state’s foreclosure reformation.
Resolution Systems Institute is proud to share its latest publication, Saving Homes, Building Understanding: An Evaluation of the Eight Foreclosure Mediation Programs Funded by the Illinois Attorney General. This new evaluation looks at four-plus years of data across eight different programs to provide a comprehensive analysis of foreclosure mediation in Illinois, and to highlight how differences in program models impacted outcomes. (more…)
August 31, 2018, will mark the end of an era at RSI. Our five-year foreclosure mediation grant from the Office of the Illinois Attorney General will come to an end.
This grant, which we received 15 years into our operation, was our opportunity to prove that when given sufficient resources, RSI could deliver the kind of quality court mediation program that we had been recommending to others all those years. I used terms like “practice what we preach,” “proof is in the pudding” and even, “put up or shut up!”
At that time, we promised to:
- Work with courts and other stakeholders to design and operate three foreclosure mediation programs in three judicial circuits in northern Illinois
- Develop and conduct training for mediators in our programs and those operated by our partner organizations farther downstate
- Develop an online system to collect data about the programs enabling us to produce regular statistical reports and two comprehensive evaluations
I am happy to report that we delivered!
In the process, we confirmed some maxims about how to do quality court ADR and added a few corollaries.
- Study first
Before we start working with a court on their ADR program, we update our knowledge of the particular area in which we will be working. In this situation we researched what was happening across the country with foreclosure and how courts were using alternative approaches.
Corollary: Sometimes you have to build the plane while flying it. In the midst of a national foreclosure crisis, courts across the country were scrambling to keep up. While it was helpful to see what others were doing, we needed to figure out how to do foreclosure mediation in a way that worked in Illinois courts with their particular needs and resources.
- Work with stakeholders
We know that it is critical to bring together all the stakeholders while developing a court ADR system so that their various needs can be considered. In foreclosure mediation, the usual stakeholders – judges, court administrators, mediators and lawyers for both lenders and borrowers – were joined by a new addition: housing counselors, who were critical to the success of many of the programs.
Corollary: As important as it is to have all the voices heard, in the end, judges often have to make decisions about exactly how court ADR programs will work, and these decisions may not satisfy everyone. Fortunately, RSI doesn’t “have a dog in the fight,” so we can offer unbiased, expert advice about pros and cons of various approaches.
- Value the people who do the work
Never underestimate the importance of visible, capable staff. These programs are being continued because of dedicated program coordinators, who kept the cases moving and kept the courts informed of program progress, and because of skilled mediators who worked with intelligence and compassion in the midst of foreclosure – which is a crisis for each homeowner, even once the nation’s crisis has abated.
Corollary: These programs are not easy to administer. Juggling spinning plates is an apt metaphor for the challenge of administering programs with sometimes complex court rules that apply to everyone from sophisticated lawyers to overwhelmed homeowners.
- Collect and use reliable data
Turning data into meaningful information means different things to different stakeholders at different times. In the foreclosure mediation programs, we produced everything from monthly statistical reports for judges about numbers of cases in their programs and how they were being resolved to a mega-evaluation of all the programs that compared strengths of the various approaches and made recommendations about how each might improve.
Corollary: In a situation like this one in which every program was different, finding ways to make “apples to apples” comparisons was critical. Doing that successfully allowed RSI to make recommendations for improvement from a place of knowledge, not opinion.
Success and a New Era
September 1st will mark the beginning of a new era, as all three of our foreclosure mediation programs continue to operate thanks to the support of their local courts! We take this as the surest sign of success, that the courts value these programs enough to find a way to continue them when outside funding ends. We are grateful to the Attorney General for supporting these programs, to courts for their partnership and to the skilled mediators for conducting the mediations. We are pleased to continue to provide services to homeowners and their lenders when foreclosure looms.
In August, we reported that the Nevada legislature revived the state’s foreclosure mediation program by passing Senate Bill 490. One of the most notable changes Senate Bill 490 brought to the program included the transfer of program management duties from the Nevada Supreme Court to the Nevada District Courts and Home Means Nevada, Inc., a state affiliated non-profit that was created to address challenges and needs of distressed homeowners. As Home Means Nevada describes, under this new structure when an individual receives notice of default, they will then petition the District Court to participate in mediation. The District Court will then assign a mediator to mediate the case and Home Means Nevada will work closely with the courts and mediators to ensure a successful program.
This month, Home Means Nevada announced that it has selected Hope LoanPort’s® (HLP) web-based platform as the designated channel to administer the program. Founded in 2009, HLP was initially created to help solve the foreclosure crisis by developing a web portal where non-profit credit counseling agencies, attorneys and homeowners could apply for a loan modification or other solution. Today, the HLP platform has become a one-stop shop for homeowners nationwide to send documents to their mortgage companies. As Business Wire reports, the HLP portal will be the designated channel through which Home Means Nevada will administer the foreclosure program. As United Trustees Association reports, the HLP portal will streamline the document sharing process and will afford parties the opportunity to see and receive updates for their case in real time.
The HLP platform will be implemented in several stages with the first phase scheduled to launch July 1, 2018. The HLP Nevada Foreclosure Mediation page can be accessed here and contains updates, information on registering, and access to HLP platform training for counselors, servicers, and attorneys.