Mediation Plan in N.Y. to Contain the Tide of Repo Home
Mayor Michael Bloomberg of New York City is planning to adopt a campaign used by the city of Philadelphia in Pennsylvania to contain the tide of home auctions in his area.
Philadelphia successfully helped about 1,200 homeowners avoid foreclosure under its mandatory mediation program between lenders and distressed borrowers.
Bloomberg said that the city wants what Philadelphia has done, adding that a state law is needed to require all parties involved to get into the negotiating table. According to Philadelphia Mayor Michael Nutter, requiring lenders to meet with distressed homeowners can help speed the procedure and avoid foreclosure.
He said that about 35 percent of homeowners who were facing a repo home nightmare and eligible for mandatory mediation have met with their lenders. And currently, about 35 percent of who attended mediations reached an agreement and settlement. There are 1,500 potential foreclosures that are under negotiation in Philadelphia.
Nutter said that his government knows that the mandatory mediation program works. However, he pointed out that cities cannot make the program work alone, adding that the support of the national government would mean a lot for the success of the program.
Meanwhile, Bloomberg noted that it is important that all parties involved should attend the mediation meeting. If a couple owns the repo home, both should be present at the meeting, so is the lender, Bloomberg reiterated.
On the other hand, Council Member Thomas White said that southeast Queens is the city’s foreclosure epicenter. He pointed out that the Center for NYC Neighborhoods is offering free legal and counseling foreclosure services to distressed homeowners in his district.
He explained that services like this are important because there are many unscrupulous people who would not hesitate to take advantage of distressed homeowners’ desperation.
To access the free services, New York residents can 311. All calls made on this number will be transferred to a call center where interviews will be conducted and then callers will be connected to expert counselors in their neighborhoods.
Association of Community Organizations for Reform Now (ACORN) Chief Executive Officer Bertha Lewis said that Philadelphia’s campaign has become a role model that other cities emulate. She added that the mediation program works because all parties are required to meet to work out solutions to avoid the repo home problem.
