Department has seen and reviewed hundreds of cases since its inception in 2012
Delaware residents facing down a foreclosure will have a little more time to deal with their situation.
On Tuesday, Feb. 25, at a New Castle County community services committee meeting, representatives from the attorney general’s office announced that the state’s Residential Mortgage Foreclosure Mediation Program has been extended until January 2018.
Program administrator Jennifer Smolka said the purpose of the program is to sit homeowners down with their lenders and find some path to take other than foreclosure.
Those options include loan modifications and principle interest rate reductions, among others.
Smolka said that in 2009, over 6,600 foreclosures actions went through the court system in Delaware, and another 1,500 in 2010 – numbers she referred to as shockingly large.
“Prior to 2007, we were seeing on average about 2,200 court filings a year,” Smolka said. “Once the foreclosure crisis hit, those numbers tripled.”
The program is automatic, Smolka said, so every eligible household is scheduled for a mediation conference, the purpose of which is to eliminate the “paper chase” and let the lender know that steps are being taken to prevent a foreclosure.
“This program facilitates the conversations and the communications between the parties,” she said.
Smolka said that while the foreclosure crisis has ebbed somewhat, Delaware still experiences high delinquency in its mortgage inventory, with New Castle County carrying the highest number of filings in the state.
In 2013, the state had a 6.3 percent “seriously delinquent” rate, as per the National Mortgage Bankers Association’s quarterly delinquency figures.
“That is, any mortgage that is 90-plus-days behind or is in active foreclosure,” Smolka said.
The national average for that same quarter was 5.41 percent.
Deputy District Attorney Gillian Andrews said that filings in 2012 – when the program first started – drastically reduced as banks and lenders decided to give the program a chance to work.
“They essentially halted a lot of their mediation filings,” she said.
Andrews said that the department has had 2,162 cases filed under the mediation program since its inception in January 2012, with over 1,500 cases scheduled.
She added that the program’s overall participation rate – meaning homeowners attending their scheduled mediation conference – is at 57 percent.
Andrews said they define “success” as either a case ending in a situation other than foreclosure, or one in ongoing mediation, with 63 percent of cases reaching those points.
“We do think we have definitely been able to make a difference,” Andrews said.
For more information on the program, visit delawarehomeownerrelief.com/mediation.php.