Philadelphia Foreclosed Homes Curbed by Mediation Programs
November 19th, 2009 by 
Joseph Smith
Philadelphia foreclosed homes have not been rising as fast as in other metro areas partly because of the implementation of several programs aimed at stemming foreclosure actions.
According to a foreclosure monitoring company, only 0.42 percent of residential units in the Philadelphia metro area were in foreclosure in the July-September quarter, putting the Philadelphia, Camden and Wilmington metro area 110th in a ranking of 203 large metro areas based on foreclosure rates.
The Las Vegas metro area, which topped the list had a foreclosure rate of 5.13 percent, and the second, Merced in California, had a rate of 3.72 percent.
Among the foreclosure prevention initiatives in Philadelphia is its conciliation conference program. Under this program, no lender can foreclose on an owner-occupied house without first meeting the distressed homeowner in a meeting together with a certified counselor. The homeowner will also be provided with counseling and legal representation.
The Philadelphia model has been duplicated in other cities such as Pittsburgh, Chicago and Louisville and has helped hundreds of homeowners avoid foreclosure.
In Philadelphia, whenever homeowners receive delinquency notices from their lenders, the city court schedules a conciliation conference. Volunteers working for housing nonprofits visit delinquent homeowners, give them fliers about the conciliation and advise them to call a certain hotline that would link them to a free housing counselor. This process has been effective in communicating with troubled borrowers and containing the number of foreclosed homes.
Conciliation conferences are done every Thursday morning in the courtroom of the Philadelphia City Hall. Volunteer lawyers talk with homeowners and then negotiate with corporate lawyers while borrowers wait.
Some homeowners get modifications that enable them to make lower monthly payments and keep their homes while others who can no longer afford to pay are advised to pursue other options or to accept cash to move out of their homes.
The city conciliation program has been effective in helping implement the federal Home Affordable Modification Program, which is not mandatory for lenders to carry out. It has been common for lenders to reject or ignore loan modification applications without giving explanations.
In Philadelphia, lenders are forced to negotiate because their foreclosure filings will not proceed if they do not first meet with the troubled homeowners. According to the Philadelphia Volunteers for the Indigent Program, the conciliation scheme has helped resolve a lot of foreclosure cases.
