Maryland’s foreclosure mediation program is a year old and some say it still needs improving, according to a story at washingtonpost.com. The program is the creation of Governor Martin O’Malley, and it allows struggling homeowners to request a face-to-face meeting with their lenders in front of an administrative law judge. Ideally, the two parties will work out a loan modification, which allows the homeowners to keep their homes.
Since the mediation program began last July, only 100 Maryland homeowners have been able to get a loan modification from their lenders. A little over 150 homeowners received contingent agreements allowing them to stay in their homes until they reach a final agreement with the lenders. Approximately 120 cases resulted in defaults because the homeowners did not show up for their mediations. Another 50 homeowners did not qualify for the program due to bankruptcy.
Homeowners and state housing officials want state lawmakers to figure out a way to make the program more beneficial to homeowners. One housing official commented that many homeowners still cannot afford the offered loan modifications.
Maryland officials originally expected about 5,000 participants in the mediation program in its first year. So far, there have been less than 1,000 claims filed in the program. Mediators and Maryland bankruptcy attorneys say the low number is partly due to banks filing fewer home foreclosures than in the years past.