This is a program provided by many court systems. The homeowner who is looking at foreclosure on their home may be able to work out a solution that is mutually beneficial to the homeowner and mortgage company. To qualify for foreclosure there are different requirements according to the jurisdiction. Most people are eligible because it is in the best interest for both the mortgage company and the homeowner to work out an agreement instead of going through with foreclosure. Going through this program does not guarantee the foreclose will not go forward. It is up to both parties involved to work out the agreement that work for both of them.
A third independent part presides over the foreclosure mediation. This independent part is called the mediator who will meet with the representative of the mortgage company and the homeowner. Their role in this proceeding is to structure discussion so that it will lead to a production solution. They may also take a proactive role in suggesting solutions that will benefit the homeowner and representative. The mediator will often meet with the homeowner and representative privately to highlight the weaknesses and strengths of their position in the negotiation.
While there is no guarantee that foreclose will be delayed, canceled, or stayed it does give both parties the probability of a good outcome. One outcome is a restructuring of payments to ease the financial burden of the homeowner along with the repayment of any back debt that is owed on the mortgage. There is also a drastic possibility is forbearance. This is a temporary staying of payments until some event occurs where the homeowner could better meet their financial obligation. Forbearance does allow for a delay of payment but the interest on the mortgage will continue to accure.
When the homeowner comes to the foreclosure mediation it is important that they are able to show their ability to pay if they are given a proposed solution. If the homeowner is seeking forbearance then the homeowner will have to show the lender the likelihood of some event that will lead to their ability to resume the payments of the mortgage at some time in the near future. If the homeowner is requesting a restructuring of payments, they will need to show what is different about the restructure that will allow them to make the payments when they could not make the regular mortgage payments. One difference might be that the restructured payments are not as much as the regular mortgage payments.
It is in the best interest of the homeowner to request foreclosure mediation and comply with what agreed upon so they will not lose their home. For the mortgage company they would not have to worry about selling a foreclosed home.