UW law students to give “lifeline” through foreclosure mediation program

From the Wisconsin State Journal, posted Wednesday, January 27, 2010

New foreclosure mediation program approved for Dane County
By Karen Rivedal

Starting Monday, Dane County residents facing foreclosure will have a new mediation option that could help them keep their homes even as new filings continue to mount.

The program, approved recently through an order by Dane County Circuit Court judges, will require lenders in a foreclosure action to provide the homeowner with a court-approved form informing them of the mediation program’s existence. If an eligible homeowner requests mediation under the program, and the lender agrees to participate, a mediation session will be conducted by volunteer mediators from the Dane County Bar Association.

UW-Madison Law School students will help families prepare for the mediation sessions. A key requirement for participating in the program is that the home at the center of the foreclosure lawsuit must be owner-occupied, program officials said Thursday.

“It’s really a lifeline that didn’t exist before,” said Kate Nardi Sullivan, a member of the Dane County Foreclosure Prevention Task Force, which is helping to support the law school program. “This new tool can really make resolution (of mortgage problems) more efficient.”

The program is modeled after one organized by the city of Milwaukee, the Milwaukee Foreclosure Partnership Initiative and Marquette University’s Law School last summer. Financial support for aspects of the programs come from the state Department of Justice.

Mediation is a confidential dispute-resolution process in which parties to a lawsuit meet with a neutral third party who helps them reach agreement by focusing on key issues, exchanging information and exploring options for a settlement.

A successful mediation likely would result in a loan modification that would allow the homeowners to afford to stay in their house by making lower payments that are still acceptable to the lender.

UW-Madison’s Economic Justice Institute, a center within the law school, asked the judges to adopt the rule. Marsha Mansfield, director of the institute, described the Dane County program as a “collaboration” with Marquette’s Law School, which will do initial screening and intake of interested Dane County participants and then pass the eligible cases on to Dane County lawyers and students for the actual mediation sessions.

“The students will actually be working with the homeowners to get the right documents in order to understand what their options are and to prepare for the mediation,” Mansfield said.

In addition to Milwaukee and Dane counties, similar programs exist in Iowa and Rock counties, Mansfield said.

The new mediation program is a timely addition in Dane County, where foreclosure filings have seen a 302 percent increase since 2004. In December, new filings in Dane County were up nearly 14 percent, and it also was the 33rd straight month in which foreclosures increased compared to the year before, according to court records compiled by DaneCountyMarket.com.

Statewide, new foreclosures increased 18 percent compared to December 2008.  

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