• 10
  • February
    2012

Many in the business world already know that alternative dispute resolution methods such as mediation and arbitration can save money and time. Meditation is now being hailed as a way to save or mitigate many of the predicted 10 million foreclosures in the United States over the next few years.

In Nebraska, lenders recover unpaid debt through a non-judicial foreclosure sale. Homeowners typically get a notice of sale date if the lender is planning to pursue this process. However, mediation would allow homeowners and lenders to discuss resolutions besides the sale, which could result in a better outcome for both parties.

Homeowners, investors, and taxpayers may all to benefit from increase rates of mediation in foreclosures, according to a new report from the National Consumer Law Center. Mediation fees can be very low, typically staying below $1,000. In contrast, the average investor lost about $145,000 per foreclosure in 2008 alone. Mediations can also resolve faster than traditional foreclosures, often settling the dispute in about two months, rather than the average 10 months for an uncontested foreclosure.

Mediation may help preserve credit ratings and keep the valuable assets of the home and the land. The National Consumer Law Center report highlights the fact that not all mediation programs work, and they are not all the same. Individuals struggling with mortgage payments should consult an experienced attorney to determine if meditation is a viable alternative to foreclosure or bankruptcy.

Consumers should exercise caution with companies who offer to negotiate with the bank on their behalf, since many of these operations do not deliver reliable results and may not have your best interests in mind while negotiating. Retaining an attorney gives individuals a dedicated advocate that will put the homeowners' interests first.

Source: National Consumer Law Center, "Foreclosure Mediation Can Save Millions of Homes and Taxpayer Money," Feb. 6, 2012.