Rebuilding America

How States Can Save Millions of Homes Through Foreclosure Mediation


The evidence is in: Foreclosure mediation programs are a proven, inexpensive tool to help keep paying borrowers in their homes while saving communities and investors billions of dollars.

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Published February 6, 2012
©National Consumer Law Center

In 2012, the U.S. is reaching the mid-point of a devastating foreclosure crisis, expected to result in an additional 10 million homes being lost (nearly 3 million homeowners have already been displaced through foreclosures). Yet there is an inexpensive fix to the broken housing crisis.

The evidence is in: States that adopt strong foreclosure mediation programs can keep paying borrowers in their homes over the long term while saving billions of dollars for taxpayers and investors. Such programs are an inexpensive tool in the toolkit to help rebuild America. State policymakers who ignore this option are needlessly exposing families and communities to severe, long-term hardships that can be avoided.

This nationwide report reviews existing programs in 19 states and makes recommendations for best practices for all states to adopt, using foreclosure mediation data from the last three years to draw its conclusions. The report includes examples of programs that are more successful and those that are less so; state references per section; tables; and a history, including statistics, of documented mortgage servicer problems and the Home Affordable Modification Program (HAMP).

Highlights and key recommendations from the report include: