Negotiations for the Home: A Balanced Approach to Good Faith in Foreclosure Mediation

The high foreclosure rate for residential properties in the United States has caused millions of Americans to be cast out of their homes and investors to incur massive financial losses. With the foreclosure crisis continuing and foreclosure filings expected to increase, all levels of government continue to search for a solution that will address the problems faced by affected parties. One popular method adopted by courts and legislatures at the state and local level has been to use foreclosure mediation programs. At a minimum, these programs provide for some contact between a servicer and a borrower before resorting to a foreclosure sale. Developers of mediation programs, however, have struggled to create a system that encourages meaningful participation and provides parties with a reasonable chance for beneficial outcomes. This Note presents an anal-ysis of the use of foreclosure mediation programs by various jurisdictions and the praise and crit-icism of the programs, including the advantages and disadvantages of good faith participation re-quirements within such programs. Ultimately, this Note recommends that foreclosure mediation programs require good faith participation using objective standards and impose sanctions for failure to comply with those standards.

The full text of this Note is available to download as a PDF.