Homeowners offered mediation program to relieve foreclosure blues
Gregg Reese | 7/20/2011, 5 p.m.
Several years have passed since the housing "bubble" burst, and with the passage of time scores of homeowners still find themselves unable to meet their mortgage payments. Along with that reality comes the menacing threat of eviction, the specter of homelessness and all the attendant problems that go with it.
The government's steps to provide a reprieve from adversity, including variations of renegotiation or modification, have progressed with mixed results, and have generated mounting criticism directed at financial institutions, the real estate industry, and elected officeholders' response to the mortgage.
Recently, a new approach was launched in various parts of the country, among them our own neighboring Orange County, which offers distressed homeowners the opportunity to have a "face to face" with their creditors. The two parties meet with a third, impartial monitor. This neutral mediator in some cases can develop a settlement attractive enough to the lender that offers the opportunity to make a profit by working with the homeowner to help them keep their house.
To explore the possibility of expanding this fresh approach in Los Angeles County, a presentation was submitted at a town hall meeting in Supervisor Mark Ridley-Thomas' Constituent Service Center on Vermont Avenue near Manchester Avenue on July 9. Among those explaining this process were attorneys Patricia Pinto of the Legal Aid Society of Orange County and Los Angeles native Alon Cohen, now working with Washington, D.C.s' Center for American Progress.
Pinto explained how the plight of so many homeowners, many of them elderly and previously affluent, begging for assistance, compelled judges within the court system to find an alternative to policies then in place that quite often provided inadequate resolutions to their predicaments.
Toward that end, in 2010 alternative interventions utilizing the judicial process were pressed into service at the state level. Legislation was drafted to protect homeowners from foreclosure by ensuring that lien-holders follow the state laws regulating home loans. Additionally, borrowers were given the opportunity to seek out other options, including modifications, before reaching the point of foreclosure.
These steps were put into practice as an adjunct to complement additional, pre-existing tools like unemployment compensation and other assistance to weather the housing crisis. At the same time, both the current and previous presidential administrations inaugurated programs for financial relief, even as criticism mounted.
In a post town hall interview, Cohen explained that any assessment of the (Barack) Obama administration's measures to tackle the country's woes should be viewed in light of the circumstances during which they were put into service.
"We started in uncharted territory, so it is not surprising that not everything worked as planned."
Once in office, Obama staffers toiled to carry out the Troubled Asset Relief Program (TARP) inherited from George W. Bush, while developing a platform to deal with the housing crisis, in essence starting at square one, said Cohen. A major effort of the current administration, the Home Affordable Modification Program (HAMP), has been hampered because eligible mortgage buyers have not chosen to partake of it, at least not in the numbers anticipated.