The Marquette University Law School in Milwaukee, Wisconsin has launched a mediation program designed to help distressed borrowers avoid bank REO properties. The mediation program is available for lenders and distressed homeowners who are at risk of foreclosures. The foreclosure prevention program is funded with money that came from the successful case against the mortgage lending company, Countrywide Financial Corp.
Joseph Kearney, dean of the Marquette Law School and Wisconsin Attorney General J.B. Van Hollen have announced a funding amounting to $310,000 for the law school to hold the Milwaukee Foreclosure Mediation Program.
Aside from this, Milwaukee Mayor Tom Barrett also announced the availability of $100,000 for the mediation program from the city.
The mediation program aimed at preventing foreclosures is voluntary in nature. It is a court-based and independent mediation program for distressed homeowners and lending institutions.
The program, based at the Milwaukee County Courthouse, will seek to ease the current pile of repossessed homes cases in the county's court system by providing a mediation option to troubled homeowners who are living in owner-occupied houses.
A statement issued by the law school said that successful mediations will serve as venues to modify loan terms to make payments affordable and allow distressed homeowners save their properties from foreclosures.
Aside from loan modification, the mediation program can also offer short sale, refinancing or other solutions that may help homeowners avoid bank REO properties. The mediation program will help execute final agreements that are mutually agreeable between concerned parties.
The funding for the mediation program partly comes from a settlement of the case with Countrywide. The mortgage company was accused of misrepresentation involving the benefits and quality of its products.
Under the settlement, Countrywide agreed to a $1.6 million payment for repossession relief benefits. Additionally, the lender agreed to forego various mortgage loan fees and to modify loans for delinquent homeowners. This agreement is expected to result to a settlement with a total value of $41.1 million.
Wisconsin has been experiencing a surge of bank REO properties since the start of this year. Foreclosure filings were made on 8,910 properties, an increase of 58 percent from the last quarter of 2008 and 57 percent higher compared with figures in the first quarter of 2008.
Last March, a total of 3,812 homeowners were served with foreclosure filings, representing a 28 percent rise in the total number of bank REO properties in February and 84 percent higher from the March 2008 total.
