Prepare For Mediation!
Well, that was fast. In today's blizzard of Council votes, Councilmember Muriel Bowser shoved through an emergency version of legislation she introduced a couple weeks ago that would require mediation between a lender and the person about to be foreclosed upon, and require the new owner to rent the property back to the old owner if he or she wants to stay. The mayor has ten days to veto it, after which the measure will take effect–though it'll take a little longer for the Department of Insurance, Security, and Banking to write up the regs that will govern who mediates and how. Once that happens, this could be a significant change for homeowners at risk of foreclosure. In certain circumstances, Bowser's bill allows for a Mediation Administrator to impose sanctions on a lender who refuses to cooperate, including loan modification "in the manner determined proper by the court."
It's important, though, not to lose sight of the fact that resources are scarce for counseling that can prevent that foreclosure notice from being sent in the first place. And that should be a priority, because it would be too bad if the system DISB sets up, either because of inadequate funding or incompetent administration, didn't run as smoothly as planned. For example, the three-member Rental Housing Commission has been without a quorum for many months now, creating headaches for tenants and landlords appealing decisions of the Rent Administrator (a position held by three different people in the last year).
So here's hoping the new Mediator isn't the first place a homeowner gets help with her mortgage. What Shaun Donovan said: A lot can be done on the front end to keep people from ending up in foreclosure in the first place.
Photo via flickr user respres.