Foreclosure Diversion Program

The FDP provides mediation in foreclosure cases at the request of a house owner who lives in the residential or commercial property being foreclosed, and the residential or commercial property is their main home. (Vacation residential or commercial properties, second homes, and commercial residential or commercial properties do not qualify for mediation.) Mediation in a foreclosure case includes the house owner, the lending institution, lawyers on the case, and a neutral mediator. The mediator helps the parties speak about how they may settle their case. In mediation, the celebrations choose the outcome of the case.


On this page:


Benefits of mediation in a foreclosure
How to ask for mediation
The Informational Session

Homeowner preparation for mediation
If you are not able to attend your set up educational session
After mediation
Contact


Benefits of mediation in a foreclosure


Parties have an opportunity to talk with each other in a casual setting with the aid of an arbitrator. Both sides share an interest in keeping the homeowner in the home and paying the mortgage.


A long-lasting advantage of mediation is enhanced interaction in between the celebrations. Mediation gives the homeowner and lender the chance to discuss how to fulfill their shared objectives. The arbitrator can help focus the conversation and raise alternatives the celebrations may not have actually believed of or understood about.


Since the foreclosure mediation program began in 2010, approximately 60% of cases mediated have actually been dismissed (ended without a foreclosure).


How to request mediation


Please do not disregard the court documents. Complete and return the Response to Complaint and Request for Mediation form included with the foreclosure court papers or send out a composed request to the clerk's office where your case is being dealt with. Request mediation within 20 days of receiving the court papers. Even if you miss this deadline, it deserves sending the court a demand in composing if you believe mediation might help since you may still have the ability to participate.


The Informational Session


Before a case can be arranged for mediation, the house owner must participate in an Informational Session. If you ask for mediation in composing by the due date, the notary will schedule you to go to an Informative Session with other homeowners. You will get a notification in the mail to let you understand when and how to come to the Informational Session. It will occur either at a court house or on Zoom. Lenders might attend, but are not needed to participate in, since this session supplies information and assist tailored to house owners in foreclosure.


Court personnel will greet you, and you will discover from a judge about the basic procedure in a foreclosure case. A HUD-certified housing counselor will discuss how to deal with your lending institution. These discussions may be by video. After you have been to an Informational Session, you will have your first mediation session.


Mediation


In mediation, you will have the chance to discuss your goals for the residential or commercial property, ask concerns, and learn about your alternatives. The lending institution will offer information on the status of the loan. You and the loan provider will go over how you may avoid foreclosure and what documents will need to be sent.


The mediator will assist you and your lending institution develop a particular plan to fix the case, if possible. The mediator does not take sides or decide how the case ought to be solved. At the end of each mediation session, the mediator composes a clear report on agreed next steps and due dates. Find out more about mediation.


Mediator's Report


For every mediation session, the mediator writes an Arbitrator's Report. The conciliator will review the report with you to make certain it is clear which you concur with what it says. If you do not understand or concur with any part of the report, make certain to ask questions and ask the arbitrator to make changes before you sign the report. After you and the other celebration sign the Mediator's Report, the arbitrator will submit it to the court for your file and you will get a copy of it.
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Follow-up Mediation


If another mediation session is needed, the Mediator's Report will say that, and the court will set up a follow-up mediation session.


Homeowner preparation for mediation


Before the Informational Session and mediation, believe about your objectives for the residential or commercial property. Do you wish to remain in the home or vacate? What is the market value of the residential or commercial property? How much do you owe?


Some alternatives to foreclosure that you may want to check out in mediation include:
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- Permanent "loan modification;"
- Temporary or short-term "forbearance agreement and payment plan;"
- Giving the lending institution a "deed in lieu of foreclosure;" or
- Having the lending institution approve a "short sale" of the home.


See Terms that might come up in your mediation for meanings of these and other terms.


Before accepting any specific approach, talk with a HUD-certified housing therapist. This is a totally free service to help you examine your financial scenario. The housing therapist will provide specific recommendations on what options you may have to avoid foreclosure. A housing therapist will be present at your Informational Session, but you may want to call a counselor before the Informational Session. Find HUD-approved Housing Counseling Resources in Maine.


You may likewise desire to talk with a lawyer with experience in property foreclosure law. An attorney can offer info on the legal procedure specific to your circumstance, help identify legal defenses you might have in the court case, and assist you weigh alternatives.


You do not require a legal representative to go to mediation, but if you are represented by a lawyer, your legal representative needs to participate in mediation. See Get Legal Help for choices for talking with an attorney.


You are not required to bring paperwork to the very first mediation session, but you may want to start collecting a few of the following to prepare yourself to deal with your housing therapist or legal representative:


- Any correspondence from the lender or mortgage servicer or its legal representative, even if the correspondence is unopened;
- Court documents (foreclosure problem, copy of your response, etc);.
- Recent pay stubs or other income source;.
- Last 2 months' bank declarations; and.
- Last year's income tax return.


If you are not able to attend your arranged informational session


If you can not attend an Information Session by the due date in the notification, you should ask the court to set a new due date (to "continue" your court event). Your demand must remain in writing and be gotten before the due date.


If you can not go to a mediation on the date arranged, you must ask the court for a brand-new date by a "motion to continue" your mediation session. Again, your request needs to be in composing and sent to the clerk and the other celebrations.


Send your request to the court (with a copy to the lending institution) as soon as you can. See Motion to Continue Mediation in Foreclosure Action (FDP-004). Do not presume the court will give your demand. If you do not hear from the court that the movement to continue has actually been approved, you should attend the court event as scheduled.


After mediation


Following each mediation session, the arbitrator submits an Arbitrator's Report to the court, explaining strategies and arrangements made in mediation. If celebrations make a contract to settle the case in mediation, the Mediator's Report explains the actions to close the case. When all the steps are finished and your case is settled, one or both parties need to notify the court in composing. The case will then be over.


If you are not able to reach a final arrangement in mediation however desire to continue to work towards a possible alternative to foreclosure with the loan provider, you might ask the court to "remain" the case (stop briefly the case) for a time period. If you and the lender settle on this, both of you will send a Joint Motion to Stay Foreclosure Action Following Mediation (FDP-10).


If you are unable to reach a contract in mediation and have no immediate plan to keep collaborating with the lending institution, the case is normally "gone back to the docket" (return on the court's schedule) and moves forward. However, you and the loan provider can try to settle the case at any point while doing so, even up to and at trial. See Foreclosure Step by Step to learn more on the foreclosure court procedure.