There’s a new law in Town… to help you stay in your home.
Under a new Foreclosure Fairness Law beginning July 22, 2011, if you are in trouble with your mortgage on the home you occupy and you are facing a possible foreclosure, you may have the right to meet with your lender and even demand mediation to attempt a modification of your loan terms. Here is what you can expect:
- If the foreclosure of your home started after July 22, you will receive a letter from your bank/lender. Before certain banks* can foreclosure on your property, they will send you a letter inviting you to talk with them to discuss possible solutions. If you don’t get back with them, they must also try to reach you by phone.
- The bank letter or phone call will advise you to call a housing counselor or attorney. You should consult your lawyer. If you do not have a lawyer or prefer to a consult a housing counselor, you may do so at no cost. You can reach a housing counselor by calling: 1-800-894-HOME (4663) If you choose not to consult a housing counselor or lawyer, you can still meet with your lender, but you cannot demand mediation. Whatever you choose, you must act quickly after you receive the letter and/or phone call from your lender. Your time to demand a meeting or mediation is very short.
- A housing counselor or attorney can demand mediation.* Mediation forces your lender to discuss your options for staying in the home. You may bring your lawyer or housing counselor to the mediation. A third party, the mediator, insures a fair discussion. You will have to share a $400 mediation fee with your bank/lender.
- If a foreclosure of your property has already begun by July 22, 2011, you will not receive a letter or phone call from your bank or lender. However, you may still have a right to demand a meeting with your lender and if you contact a housing counselor or lawyer, they may still be able to demand mediation. Time is short to make the necessary demands so you should contact your lawyer or housing counselor immediately if you have already received foreclosure paperwork from your lawyer.
*This only applies to banks or lenders that have filed at least 250 notices of default in the prior year. A list of those banks/lenders that are exempt from the law is available on the Department of Commerce website.
Find out more at the Department of Commerce website.