That’s the question that comes to mind after reading this article by the AP’s Oskar Garcia about the apparent (albeit small-scale) success of a new foreclosure mediation program in Nevada. According to the article, the program is “keeping nearly half its participants in their home and avoiding foreclosure in nearly nine in 10 cases”.
The housing bubble ravaged Nevada. Nearly seven percent of all homes with mortgages in the state received a foreclosure notice in November. Las Vegas and its surrounding areas have been hit particularly hard. Recent estimates say that prices in Las Vegas will not return to their 2006 peak until 2032. Recent numbers from Case Shiller show that home values in the city are down an incredible 57 percent as of October 2010.
In response to this crisis, the Nevada State Legislation passed the mediation law in 2009. According to former Assembly Speaker Barbara Buckley, two thirds of mediations ended with an agreement, and nearly half of all mediations kept the homeowners in their homes.
The program “allows homeowners to sit down with mortgage lenders, under the leadership of trained mediators, to discuss alternatives to foreclosure”. While the mediator cannot order a decision, the process has thusfar proven fairly effective.
Under the law, anybody who is not in bankruptcy whose primary residence received a foreclosure notice after July 2009 is eligible for the program. Once the homeowner requests mediation, the lender is bound to participate in a meeting, although no decision can be forced upon either party. For complete information on the mediation process see this page on the Nevada Judiciary’s website.
I am not sure if it would be logistically possible to do something like this nationwide, but the success of the fledgling certainly bears watching. What do you think? Do you think this mediation model could find success elsewhere? Let me know in the comments section below?
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