Hearing Scheduled for Statewide Foreclosure Mediation Program

Hearing Scheduled on SB-255 (establishes a statewide home mortgage foreclosure mediation program)

On Wednesday, October 7th at 10 AM, Room 413 North GAR Hall, State Capitol, Senator Lena Taylor’s Committee on the Judiciary, Corrections, Insurance, Campaign Finance Reform, and Housing, will conduct a hearing on her bill, SB-255, that would establish a foreclosure mediation process and charge the Director of State Courts with implementation. The hearing is scheduled to last an hour.

SB-255 emphasizes the role mediation can play by making mediation a mandatory option for homeowners and mortgage lender/servicers in order to address the ever-increasing number of foreclosures statewide.  As currently worded, the bill contains process issues and definitions that could affect mediator privilege and related topics such as qualifications for being included on a mediator roster.  Along with WAM, a number of potentially affected groups, such as the law schools at Marquette University and University of Wisconsin Madison, who either have or are in the process of setting up county-level foreclosure mediation programs in conjunction with local rules issued by county circuit courts and participation by county bar associations, along with the Wisconsin Bankers Association, are tracking the bill.

This bill was the subject of a statement issued by WAM two weeks ago in response to enquiries from a Capital Times reporter who is following this issue and planning a series of articles.  Over the coming weeks, WAM will provide additional information as the legislative process continues, and the Legislative Committee and WAM Board have an opportunity to consider and discuss the bill.

The text of SB-255 can be found here:  http://www.legis.state.wi.us/2009/data/SB-255.pdf

See the WAM Blog for a statement about the bill: http://wamediatorblog.wordpress.com/

WAM’s Statement to Capital Times Regarding Pending Foreclosure Mediation Legislation

Given the current home foreclosure crises that all states are experiencing, something like Senator Lena Taylor’s mortgage foreclosure bill is sorely needed for Wisconsin.  We are particularly pleased that it emphasizes the role that mediation can play in resolving mortgage foreclosure disputes, particularly when a number of options are available and the parties are voluntarily willing to collaborate on an outcome that may result in the homeowner being able to remain in their home, or to negotiate other outcomes that are not as destructive to a family as eviction can be. While we closely study Senator Taylor’s bill, the Wisconsin Association of Mediators will not take a position until we have had an opportunity to discuss the bill with our membership largely comprised of active mediators.
Nevertheless, we have a number of questions about the bill, such as whether or not it sufficiently protects the confidentiality of the mediation process and mediator privilege as distinct from a judicial process when “good faith” and other exceptions to confidentiality are raised by the bill when the mediator is asked to provide an affidavit describing party behavior.
Another question arises as to what the credentials of the mediators involved should be.
Some of our WAM members are currently either involved in or helping to develop county circuit court mortgage foreclosure initiatives; would this bill allow for such local options to continue, particularly those where foreclosure mediations are already taking place, such as in Milwaukee and Iowa Counties, and where other counties, such as Dane County, are currently considering a local rule emphasizing mediation, and where local institutions including the county bar association are preparing to offer foreclosure mediation.
Aside from definitional questions, such as whether missing two mortgage payments is the only trigger for default, is the bill too narrowly focused on the mortgage, and are the timelines and procedural steps calibrated in a way that will unnecessarily complicate the process and result in inadvertent mistakes that will prevent mediation from otherwise occurring between willing parties?
Given the urgency of the foreclosure crisis, are there other venues, such as the Farm Mediation Project at the Wisconsin Department of Agriculture, Trade and Consumer Protection that have existing administrative structure in place with a roster of mediators and frequent mediator trainings that should be considered for program administration?
We look forward in the coming months to working with Senator Taylor on this bill, particularly as hearings are scheduled and other interest groups offer their opinions.

WAM Legislative Committee to Meet 8-21-9

The WAM legislative committee will meet to review Senator Lena Taylor’s proposed Foreclosure Mediation BillThe committee requests your feedback, please place your comments below.

New Mediators Needed

Tad Mayer wrote the following request to WAM.

MWI is in the process of expanding its panel of employment mediators for a national client.  I’m writing to you because mediators from your organization may be a good fit for MWI and the panel.

The goal of my email is to provide you with information about MWI, explain the primary guidelines of mediating for the program, list the cities in which MWI is reaching out to mediators and ask that you forward the attached MWI Employment Panel Application Form to appropriate mediators.  If mediators from your organization are accepted to the MWI Employment Panel of Mediators, their names will be included on mediation rosters for cases in their regional areas.

MWI Overview

Founded in 1994, MWI is a nationally recognized full-service dispute resolution firm that provides innovative services and training to corporate, institutional, and individual clients seeking to improve their capacity to resolve difficult disputes.

MWI offers comprehensive services in the areas of mediation, arbitration, negotiation, facilitation, external organizational ombuds, and dispute resolution system design.  MWI mediation specialties include:  Business & Commercial, Workplace & Employment, Real Estate, Bankruptcy, Construction, Divorce and Franchise.  MWI has trained thousands of professionals in mediation, negotiation and dispute resolution over the past 15 years.

A representation of MWI clients includes:

- Coca-Cola Enterprises, Inc.;

- General Motors Corporation;

- Bose Corporation;

- BMW North America;

- Analog Devices, Inc.

Our employment panel works with clients nationwide.

Program Guidelines

Below are the primary mediation program guidelines for your consideration:

- Mediators are paid a rate of $250 per hour with a 1/2 day (4 hours) or

full day (8 hours) minimum, depending on the case;

- Certain MWI clients have asked our mediators to use a

facilitative, interest-based approach when mediating.

MWI Mediators must be able to:

> Focus on the interests of the parties and not provide

an evaluation of the case, even in a private session with

each party;

> Work with both parties and their counsel to reach their

own resolution;

> Be conversational rather than formal.

Cities

MWI is reaching out to mediators in the following cities:

- Albuquerque, NM

- Chicago, IL

- Cincinnati, OH

- Cleveland/Akron/Youngstown, OH

- Detroit, MI

- Hartford, CT

- Houston, TX

- Indianapolis, IN

- Jackson, MS

- Kansas City, MO

- Memphis, TN

- Milwaukee, WI

- Minneapolis / St. Paul, MN

- Montgomery, AL

- Pittsburgh, PA

- Rochester / Buffalo, NY

- San Antonio / Austin, TX

- St. Louis, MO

Application:   http://www.mwi.org/workplace/application.doc

Please forward the attached MWI Employment Mediator Application Form to mediators who may be interested, have five years of full-time mediation experience and have completed 100 employment mediation’s during this time.  MWI appreciates you taking the time to forward the application and your mediators taking the time to fill it out so that we can have a comprehensive overview of their experience and qualifications.

The completed applications are due to me by Friday, 7/31.  Applicants should feel free to attach their resumes and other documents that will help us better understand their mediation background.  I will advise them by Wednesday, 8/5 if they have been accepted to the panel.

Feel free to forward this email to other ADR organizations who you feel would be qualified for, and interested in, MWI’s Panel of Employment Mediators.

More information regarding MWI is available at <www.mwi.org>.  Please forward any questions about the application to me at <tmayer@mwi.org>.

Mortgage Mediation Act

Taylor Puts Bill Forward to Help Both Parties in Foreclosure Process

(MADISON)  In what promises to be a better way forward for both homeowners and lenders, Senator Lena Taylor (D-Milwaukee) unveiled her Mortgage Mediation Act today, which attempts to mediate a foreclosure proceeding between a homeowner and lender.  This legislation patterns other successful programs in Minnesota and other states around the nation.  Given the recent surge in foreclosures, Senator Taylor is taking positive steps to help Wisconsin’s homeowners.

“Nobody wants to see people losing their homes and out on the streets,” said Senator Taylor.  “When a family loses their home, that means that the lender is no longer collecting payments, the municipality is no longer collecting property taxes, and the family no longer has a roof over their heads.  It is a losing situation all around and, hopefully, it is a situation that can be worked out via mediation.  This bill will help out the working class of Wisconsin and help those people who are experiencing hard times hold on to their piece of the American Dream. ”

Under current law, if foreclosure is brought upon a property, the homeowner is served with a summons and complaint and the normal rules of pleadings, discovery of evidence, pretrial, and trial apply.  If the court issues a judgment for foreclosure, the homeowner loses their home.  Unfortunately, communication between the two parties is usually difficult and burdensome.  The homeowner is often unaware of the rules and regulations and is lost in a labyrinth of telephone numbers and paperwork.  The process moves slowly, and by the time contact and progress is made, the home may be foreclosed.  This crisis is having a devastating impact on the economy, home values, and our property tax base.  Projections are that Wisconsinites will lose tens of billions of dollars in home value by 2010.

This bill creates a process to protect homeowners who own a first or second mortgage on a residential property.  They would be able to seek mediation if they went into default on a loan and the foreclosure process has begun.  If the homeowner has missed two consecutive loan payments, the lender must send the borrower a notice when beginning to foreclose.  The lender then would provide the homeowner with a written solution to the problem, which includes contact information about credit counseling services available.  The homeowner then has a right to request mediation from the director of state courts, which will assign a mediator and report the results to the court.  Parties must act in good faith in order to receive a positive review from the mediator.

The legislation is widely supported and has been drafted with the help of bankers, community banks, mediators, the Courts and various University systems, in addition to legislative colleagues and, most importantly, from the input of homeowners.

WAM Volunteer Opportunities

The following message is being shared with members of the Wisconsin Association of Mediators as a public service announcement and opportunity to volunteer some of your skills while learning first hand about the home mortgage foreclosure problem.

Lenders and home mortgage servicers will not be present and no mediation will occur.  However there are two roles where WAM member skills would be useful,  first during the initial intake process as homeowners are screened for necessary documents and asked other questions, where empathy and confidentiality are necessary, and secondly during the counseling phase where completion of loan modification documents entail other sensitive questions and appropriate follow up.  Other referral services will be available for homeowners during the day including two workshops on basic budgeting and alternatives to foreclosure.  This one-day foreclosure workshop is modeled after several successful events recently held in Chicago designed to implement President Obama’s foreclosure abatement programs.

A one-hour training for one-on-one counseling to complete loan modification documents will occur on July 28th at the law offices of Michael Best, 1 S. Pinckney Street, Suite 700, Madison from 8:30-9:30 am, or at 7:30 am on the day of the event at the MATC Mitby auditorium.  Instructions for doing intake and assessment will be provided the day of the event.

If you decide you can volunteer your time on Saturday, August 1, call or email Anne Beaman at the contact information below.  Anne Beaman is UW-Madison law student who is assisting the Dane County Foreclosure Prevention Task Force.

There will be more information concerning developments in foreclosure mediation in the forthcoming WAM Newsletter.

_______________________________________________________________________________________________

On Saturday, August 1, The Dane County Foreclosure Prevention Taskforce is holding a workshop at MATC-Truax to help struggling homeowners modify their mortgages and learn about avoiding foreclosure.  We need lots of volunteers to help make the workshop a success and to help reduce the skyrocketing foreclosure rate in Dane County.  Please help!

We need volunteers from 7:30 am until 3:00 pm (at the latest).  If you’re only available to volunteer for a half day, that’s okay too!  Of course, lunch and breakfast will be provided.

Please contact Annie Beaman for more information or to sign up as a volunteer: abeaman@wisc.edu, or 608-695-7070.

Most volunteers will have the following roles:

* staffing intake tables / screening homeowners

* proctoring educational workshops

* working one-on-one with homeowners to complete and submit loan modification applications

* manage technology: copying, faxing, scanning, etc.

Volunteers will work with homeowners who are in danger of losing their homes to foreclosure.  Homeowners will be able to:

* learn if they qualify for the federal “Making Home Affordable” loan modification program

* work with trained counselors to submit on-the-spot loan modification applications

* attend workshops on understanding the foreclosure process and financial literacy

Contact Annie Beaman for more information about volunteering.  See also http://www.daneforeclosurehelp.org/, and RSVP to the workshop on facebook at http://www.facebook.com/event.php?eid=123797871100&ref=mf

WAM Member in the News – Baraboo, WI

Mediation finds middle ground

Ben Bromley / News Republic

Baraboo attorney Angela Nichols Philipp of Krueger & Hernandez expanded into mediation a year ago, and has found it can be a great option for avoiding the court process.

By Ben Bromley

Maybe we all really can just get along.

Just because you’re divorcing someone or battling over personal property doesn’t mean you have to gear up for a bitter court fight. If you’re willing to play nice — and looking to avoid a drain on your time, money and emotions — you could solve the dispute by hiring a mediator.

A mediator is a neutral facilitator trained to help two parties reach a mutual agreement that resolves their dispute. Baraboo attorney Angela Nichols Philipp of Krueger & Hernandez expanded into this area of law a year ago, and has found it’s an underutilized tool.

“What drew me to mediation was another way to resolve the conflict without all the conflict,” she said. “I just think it’s a relatively new phenomenon.”

Wisconsin Association of Mediators co-president Katherine Bogdanoff said her group is working statewide to promote mediation as an alternative to court. “We’re still trying to educate the public,” Bogdanoff said.

Mediation isn’t for everyone, and it isn’t a substitute for independent legal counsel. But it can offer several benefits:

- money — Rather than each party hiring attorneys, they can share the cost of hiring a mediator.

- feelings — Mediation can reduce the drain on disputing parties’ time and energy. It also can be a faster way to reach a resolution, as opposed to a drawn-out court battle.

- control — The parties, rather than a judge, craft a deal. The parties are more likely to follow through on the deal — and avoid further legal wrangling — when they’ve had a hand in reaching the agreement.

Bogdanoff said mediation is empowering, because the parties work out their own agreements. “People tend to be more satisfied with the outcome,” she said. “We tend to be able to keep a good portion of them out of the courtroom.”

Nichols Philipp has worked eight years as an attorney, and practices primarily family law. She has found that in this sour economy, many embattled couples can’t afford to hire divorce attorneys. Instead, they represent themselves, and sometimes end up hiring attorneys to fix their mistakes later.

“Mediation is here for them,” she said. “Mediation can help unclog the system.”

The process often can be completed in one day. The parties set aside time to resolve their issues and draft an agreement. Once it’s done, it’s submitted to a judge for approval. The mediator’s job is to make sure the agreement follows the law.

Nichols Philipp underwent mediation training through the University of Wisconsin Extension, and continues her education through seminars presented by the Wisconsin Association of Mediators. She has special training for handling domestic violence cases.

She said mediation aligns with her family law practice, as she has grown accustomed to settling disputes. “In family law cases you are constantly mediating,” she said.

Mediation can be ideal for divorces, property disputes, small claims matters and many other types of cases. It all depends on the two parties being willing to come together.

“It truly can work,” Nichols Philipp said. “It can be a lot less stressful process.”

She graduated from Marquette University Law School intending to become a prosecutor, but finds rewards in creating positive outcomes through her mediation and guardian ad litem work. “It’s real people with real problems,” she said.

“If both parties are willing to attempt mediation, it can save them a lot of money, time and energy.”

How to learn more

Who: Angela Nichols Philipp

Where: Krueger & Hernandez, Baraboo

Contact: Call (608) 356-3961 or visit http://www.kh-law.net/

Foreclosure Mediation Training Includes Non-attorneys

Marquette University Law School is instituting a foreclosure mediation program at the Milwaukee County Courthouse. With seed money from the City of Milwaukee and funding contributed by Attorney General Van Hollen, Marquette University Law School will administer the Milwaukee Foreclosure Mediation Program

The Chief Mediator, a licensed attorney and experienced mediator, will conduct daily mediation sessions and work with other volunteer mediators to serve the parties in foreclosure requesting mediation services.

WAM members are encouraged to review the training information and if possible attend the training.  The form is set for all mediators to apply.  The information is at:

http://law.marquette.edu/foreclosure

If you have further questions please contact:

Natalie C. Fleury, J.D.

Program Coordinator for Dispute Resolution

Adjunct Professor of Law

Marquette University Law School

Legal Research Center Room 222

Sensenbrenner Hall

PO Box 1881

Milwaukee, WI 53201-1881

(414)288-8038

natalie.fleury@marquette.edu

By: Edward Harness, WAM Treasurer

Nevada Supreme Court Hears Warnings About Foreclosure Mediation

CARSON CITY — Lawyers and residents warned the state Supreme Court today that banks and mortgage loan companies might try to circumvent a new state law designed to reduce the number of foreclosures in Nevada.

One said the companies will send “sitters” to mandatory mediation hearings who do not have any authority to offer loan modifications to home buyers facing foreclosure.

Another said it will be extremely difficult to find out who owns the loan on which a home buyer is in default and facing foreclosure.

Reno attorney Robert Hager said mortgage companies typically make loans on money they receive from investors.

With the billions of federal bailout dollars given to banks over the last year, Hager contended it might be the American taxpayers who own the loan on mortgages now in default.

“No one can tell me who owns my loan,” said Reno resident Lauren Kay, who said her home is in default. “Countrywide says it is only the servicer of the loan.”

Under tentative rules developed by a Supreme Court task force, a home buyer who receives a default notice after July 1 — the law’s effective date — could request a hearing before a court-appointed mediator to see if the lender will agree to new loan arrangements.

Both home buyers and lenders would be required to submit loan modification proposals to the mediator.

Justices made little comment on the concerns raised today, but they could change the regulations based on what they heard.

The proposed regulations were designed to battle the foreclosure epidemic facing Nevada home buyers. They received their first public hearing today.

Another hearing will be held at noon Monday in court on the 17th floor of the Regional Justice Center in Las Vegas.

The rules are designed to put into effect Assembly Bill 149. The legislation, drawn up by Assembly Speaker Barbara Buckley, D-Las Vegas, passed overwhelmingly in the Legislature and was signed into law by Gov. Jim Gibbons.

Final rules will be adopted June 29 by the Supreme Court.

Hearings at which home buyers and lenders will meet with mediators and try to work out solutions will begin in August.

Chief Justice Jim Hardesty said he expects 1,200 to 1,500 home buyers will request the mediation hearings every month.

Buckley estimated the new law could save 17,700 homes that otherwise would have been lost to foreclosure.

But she emphasized from the beginning that the law would help only those who still have the means to pay a mortgage.

Nevada leads the nation in its foreclosure rate. Last year, 77,000 people lost their homes to foreclosure in the state.

The proposed rules also would require home buyers to prepare financial statements, including stating exactly what they can afford to pay on a mortgage.

At the same time, lenders would have to release appraisals showing the current worth of the home on which they seek to foreclose and estimates of what the home would sell for in a “short sale.”

Short sales are the way many lenders now dispose of the glut of foreclosed homes. Prospective buyers submit bids for a property that generally are far short of the amount of the existing loan.

Lenders decide whether to accept those bids.

Justice Mark Gibbons today questioned why lenders do not offer “short financing” to existing home buyers facing foreclosure, seeing they already agree to short sales.

Gibbons said lenders should be aware that a home worth $300,000 two years ago might be worth only $150,000 today and be willing to make loan modifications based on the new value.

With the required information from the lender and the buyer, the mediator then can strive to see if the two sides can agree to loan changes that would keep the buyer in the home.

Under the law, however, lenders are not required to agree to new loan arrangements.

More than 350 lawyers, former judges and trained mediators already have applied to serve as mediators. They will be paid a maximum of $400, half of which will be paid by the home buyer and half by the lender.

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