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Archive for the ‘Foreclosure Mediation’ Category

Illinois’ Cook County Launches New Legal Aid Program for Housing and Debt Cases

Nicole Wilmet, December 17th, 2020

Illinois’ Cook County has launched a new initiative aimed at helping resolve eviction, foreclosure, debt, and tax deed issues. The initiative, entitled Cook County Legal Aid for Housing and Debt (“CCLAHD”), provides Cook County residents and landlords access to legal assistance, counseling, case management and mediation services. The CCLAHD initiative comes as a result of a partnership between the County, Cook County Circuit Court, the Chicago Bar Foundation and a variety of community partners including Coordinated Advice & Referral Program for Legal Services (“CARPLS”), the Center for Conflict Resolution, Center for Disability and Elder Law, Chicago Volunteer Legal Services, Greater Chicago Legal Clinic, Lawyers’ Committee for Better Housing, Legal Aid Chicago and Legal Aid Society. 

The new CCLAHD initiative is currently operating its first program, the Early Resolution Program (“ERP”) and expects to start several more. Under the ERP, pro bono services will be offered to Cook County residents without legal representation including (1) tenants facing eviction, (2) landlords dealing with an eviction, (3) debtors being sued for unpaid debts, (4) creditors suing on the basis of unpaid debts and (5) residents who have defaulted on property tax payments or mortgage foreclosure payments. News outlets report that Cook County Board President Toni Preckwinkle has indicated that there will also be a tax deed specific program that will launch sometime in 2021. Those interested in learning more about the ERP or volunteering may visit the CCLAHD website. 

Delaware Begins Using ODR to Work Through a Backlog of Landlord/Tenant Cases

Nicole Wilmet, November 24th, 2020

As a result of COVID-19 and various moratoriums on evictions, Delaware’s Justice of the Peace Court is facing a backlog of landlord/tenant cases. In an effort to address this backlog, the Court recently announced that on November 2, 2020, all landlord/tenant cases filed on or after July 1, 2020, would be automatically referred to a new online dispute resolution (ODR) program. Delaware’s new ODR program operates on the Matterhorn platform and is free for parties. Participation in the ODR program is mandatory, provided the parties have an active email address, have access to the internet and are at least 18 years old. 

Through the ODR platform, parties will be able to review and respond to messages from the other party at their own convenience. The goal is for parties to utilize the ODR platform and find ways to resolve their disputes on their own. However, parties will have the option to access a mediator in the event that either (1) the parties are unable to reach an agreement on their own or (2) the parties do reach an agreement on their own but prefer to have a mediator prepare their agreement. In a Frequently Asked Questions resource from the Court, the Court notes that the mediators for the program are either specially trained Justice of the Peace Court Judges or members of the Delaware Bar Alternative Dispute Resolution section. 

In an effort to further assist parties, the Court has created ODR “How to” registration videos for landlords and for tenants. Those interested in additional information on the program may visit the Court’s website

Ohio Launches Mortgage Modification Mediation Program

Nicole Wilmet, October 30th, 2020

At the start of October, the United States Bankruptcy Court for the Southern District of Ohio adopted the Mortgage Modification Mediation Program (“the MMM Program”) for all bankruptcy cases. The MMM Program is optional but is available for debtors and creditors to use when a debtor’s property is at risk of foreclosure or other adverse action. The goal of the program is to facilitate communication and exchange of information between the parties with the hope that they will be able to create a beneficial agreement. 

The debtor must request participation in the MMM Program and if ordered by the court, then deadlines are set for both parties to provide documents, information, and reports through the program’s online portal. The program uses the Default Mitigation Management LLC (“DMM”) DMMPortal which specializes in loan modifications and online loss mitigation services. Upon the order directing mediation, the parties will have 150 days to work with a facilitator and attempt to reach an agreement. The MMM Program’s website provides extensive information on the program’s procedures, the mandatory forms, and general timeline for the program. The website also features an application for facilitators as well as a registry of certified program facilitators. To be eligible as a facilitator for the program, an applicant must be an Ohio attorney who has been admitted to practice for at least five years and has received at least eight hours of training specific to mortgage modification mediation. 

Nevada Passes Legislation to Address the Upcoming Wave of Expected Evictions

Nicole Wilmet, August 26th, 2020

In response to COVID-19, Nevada’s Governor Steve Sisolak issued a Declaration of Emergency in March to temporarily halt residential evictions and foreclosures across the state. This initial moratorium was set to expire on June 30, 2020. Before the end of June, Governor Sisolak issued a follow-up Declaration of Emergency to extend the moratorium on evictions through the end of August. This month, the Nevada Legislature passed a bill to provide landlords and tenants facing eviction with options once the state’s eviction moratorium is lifted on September 1, 2020.

It’s reported that in 2019, Nevada courts processed more than 45,000 eviction cases. Recently, news outlets are reporting that after September 1st the number of households facing eviction could vary between 135,000-270,000. Under the recently passed bill, if a court establishes a rule to utilize alternative dispute resolution (“ADR”) to address evictions, then the eviction proceedings may be stayed for 30 days to allow parties the opportunity to participate in ADR. Although the bill doesn’t specify the type of ADR to be used, when presenting the proposed legislation to lawmakers, Nevada Supreme Court Justice James W. Hardesty noted that the program would be modeled after the state’s foreclosure mediation program. Moreover, during his presentation Judge Hardesty also told legislatures that, “this is a short bill for a big problem.” Governor Sisolak signed the bill into law on August 7, 2020.

A Possible Way Forward to Addressing the Coming Eviction Crisis

Jennifer Shack, August 5th, 2020

A few changes to a housing court in St. Paul, Minnesota, appear to have reaped dividends in term of fewer evictions and more settlements. The housing court instituted a housing clinic, bringing together financial services, legal services and mediation at the same place to help those coming to their eviction hearings. Along with changes to court rules and forms, the clinic has had a number of positive outcomes for both landlords and tenants. Although only one component to the changes to housing court was to increase access to mediation, the overall concept is instructive to anyone involved in ADR and housing courts.

In “Justice Served, Housing Preserved: The Ramsey County Housing Court” (Mitchell Hamline Law Journal of Public Policy and Practice, 2020), Colleen Ebinger and Elizabeth Clysdale discuss the impetus for reform, the process for identifying and instituting needed changes and the results of those changes. The Chief Judge saw a need to make changes that would improve access to justice and bring together resources for tenants that would address the root causes of eviction. To that end, he sought the assistance of the McKnight Foundation and Family Housing Fund. They, in turn, turned to the National Center for State Courts to facilitate the planning process. Other stakeholders who were included in the planning process included legal services, the local dispute resolution center, a lawyer who represented landlords, the county’s financial assistance program, the city’s housing department, as well as judges and court administrators.

The group agreed on three areas of action: implement a number of procedural changes, improve coordination among government entities, and expand access to mediation and legal services. Procedural changes included changes to forms, such as including information in the summons tenants receive about the eviction hearing that details the financial, legal and dispute resolution services available to them. In addition, the settlement form allowed the parties to check that they had agreed to an expungement, which keeps the eviction from showing up in their credit history, and the court order was changed to include the possibility of immediate expungement. Further, if expungement was contingent on the tenant making payments, both parties were now allowed to file a notice of compliance with the payments, rather than just the landlord. This meant that the tenant had more control over whether the expungement was carried through.

Coordination among government entities was improved by providing office space in the courthouse for financial assistance workers representing two different funding agencies. This allowed them to work together and allowed tenants to apply to both at the same time rather than having to wait to be denied from one to apply to the other. In addition, the court began providing all partners with information on all litigants on the calendar, which allows them to be more prepared to assist the litigants when they come to court.

To expand access to legal services and mediation, the court and partners agreed to  have attorneys available for consultation at all hearings , as well as mediators, who would be particularly helpful in dealing with disputes that were not legal in nature. Further, the judge began promoting these services from the bench to ensure that all litigants knew about their right to access these resources.

After a year and a half, the court’s numbers appear to show an improvement in outcomes. The court has a goal of reducing evictions by 50% in five years. In the first 18 months, evictions declined by 8%, to the lowest eviction rate in 10 years. Settlements increased by 5%, to the highest rate in five years. The impact was highest on expungements, which doubled. On the other end, fears of increased trial numbers and longer court calls didn’t come true. The number of trials as a proportion of cases declined and court call length increased by 10 minutes on average.

Anecdotally, the response has been positive. Judges report that tenants are more prepared for trial, with a better understanding of the process and when and how to raise their legal defenses. Landlords, too, see benefits from the changes. They have said they appreciate having financial services at the courthouse. Financial assistance staff will spend time with landlords and landlord attorneys, developing relationships with them that, Ebinger and Clysdale note, bear fruit outside of the courthouse as well. For example, one of the services reported an increase in inquiries from landlords before they file an eviction, wanting to know if their tenants are eligible for emergency assistance.

Ebinger and Clysdale outline six lessons learned from the program:

  • a collaborative attitude between partners is critical to success
  • small changes, such as a new check box on a settlement form, can provide big dividends
  • state law matters and can have its own impact regardless of changes made at the court level
  • financial service providers are better situated to solving emergencies than individuals left on their own to navigate social services
  • different circumstances require different interventions – some litigants will need legal assistance, some mediation and some financial assistance, thus each partner is necessary for the success of the program
  • as settlements increased, so did settlement failures (e.g., tenants failing to pay arrearages as agreed to in the settlement) – along with a higher rate of settlement agreements was a greater number of affidavits of non-compliance

This approach to eviction cases is similar to the one taken by many foreclosure courts in response to the housing crisis, in which homeowners are offered an array of services (albeit not at the same time and not all at the courthouse) to help guide them through the court process and stave off foreclosure if possible. Evaluation of those programs demonstrated their effectiveness. While the data looks promising for this program, it is still early and more can be learned. It would be wonderful to know more from the tenants about their experience with the process and whether they feel they are being well-served.