Vermont Business Magazine - Vermont law entitles Vermont homeowners faced with foreclosure to request foreclosure mediation and requires the mediators to submit mediation reports to the Vermont Attorney General. The Attorney General’s Office has reviewed the reports received in 2015, and concluded that the program continues to be successful at helping homeowners and banks resolve their problems in ways that are advantageous to all parties.
In 2015, foreclosure mediators reported 108 cases to the Attorney General’s Office. Of mediations reported to our office, nearly two-thirds of all cases in which both parties participated resulted in the parties coming to an agreement that resolved the foreclosure matter. The vast majority of those agreements allowed homeowners to stay in their homes, either through a loan modification, a repayment plan, or some other agreement.
“By encouraging homeowners and their banks to come to the table and evaluate all of their options, foreclosure mediators in Vermont have helped the courts and the parties save immeasurable time and expense,” said Attorney General William H. Sorrell. “And most importantly, this process has helped many homeowners keep their homes when they otherwise might have been lost to foreclosure.”
When the parties to a foreclosure mediation were unable to reach an agreement, mediators identified several common problems as the cause. The most common obstacle was insufficient income of the homeowner to support a desired outcome. Another common reason was the homeowner’s failure to produce required documentation or otherwise fully participate in the mediation process. Finally, some mediations failed to produce an agreement because homeowners planned to pursue some option outside of the scope of mediation (sale of the home, for example).
Only one of the 108 mediation reports reviewed suggested that parties to a mediation may have participated in bad faith. That report declined to side with either party, instead referring the question of bad faith to the court. It is encouraging to see that in virtually all cases where both parties participated, mediators have found that the parties participated in good faith, further supporting the value of this process.
The Attorney General’s Office will continue to encourage participation in the foreclosure mediation program and review reports required to be submitted to the office by foreclosure mediators. Homeowners dealing with foreclosure who would like more information on the foreclosure mediation process can check the vtlawhelp page on Foreclosure Mediation. Homeowners who have difficulty making their mortgage payments are also encouraged to contact the Department of Financial Regulation’s Mortgage Assistance Program at 1-888-568-4547 before the foreclosure process begins to facilitate communication with their lender.