Facing Financial Troubles? Here’s How Mediation Can Help

foreclosure mediation

Facing Financial Troubles? Here’s How Mediation Can Help

Foreclosure and bankruptcy are two major potential eventualities when you are facing financial troubles. Foreclosure mediation is one of the ideal ways to help you keep your home if you fall behind on your mortgage payments. This article will discuss foreclosure mediation and outline how it can prevent you from suffering financial ruin. 

Avoid Foreclosure With the Help of a Mediator

An experienced mediation lawyer will educate you about the rules of foreclosure mediation, which will enable you to work with your lender to save your home. You and your lender under the guidance of a mediator can negotiate a new agreement that delineates the rules for future payments, thus lessening the likelihood of a default occurring later. As a part of this arrangement, the lender may forgive some of your accumulated debt, depending on the structure of the agreement. 

In many ways, foreclosure mediation can create a win-win situation for both parties. You avoid defaulting on the mortgage while the lender can recover the initial loan with interest. During the mediation process, the lender will carefully assess your financial position. The mediator will encourage you and the lender to explore ways to avoid foreclosure, such as a mortgage modification, repayment plan, deed in lieu of foreclosure, short sale, or some other solution.

Foreclosure Mediation in Massachusetts

Massachusetts does not possess a statewide system of mortgage foreclosure mediation programs. However, through the use of city ordinances, three leading cities in the state do have mandatory programs to help you negotiate alternative options to foreclosure.

Before the mediation process begins, you should preferably provide your lender with an accurate and detailed account of your current financial position.

foreclosure mediation rules

This information will enable your lender to determine potential solutions that could allow you to obtain a loan modification to retain your home. If no other option is feasible, mediation can still help you negotiate a dignified and reasonable exit from the property. 

An additional advantage of a mortgage foreclosure mediation program is that it may provide you an opportunity to engage with a loan counselor who will discuss with you the best alternatives considering your financial situation. This consultation will improve your ability to move toward a satisfactory outcome. 

Bankruptcy and Mediation

The mediation process can be beneficial in complex bankruptcies where the goal is to minimize the period for which the estate must remain open. At the same time, mediation can significantly bring down the transactional costs involved in prosecuting actions or defending the claims made against the estate. 

mortgage foreclosure mediation program

In a similar manner to any other legal dispute, it is possible to mediate in a single claim or preference on an ad hoc basis. All it requires is that both sides are agreeable to the idea of resolving their dispute through mediation and obtain approval from the court where required. 

Benefits of Mediation in Difficult Bankruptcies

In Massachusetts, bankruptcy courts welcome the mediation process openly. 

Judges appreciate the efforts of both parties that are willing to explore solutions through mediation without tying down the courtroom in extended litigation. A bankruptcy dispute may contain numerous unresolved preferences and claims on each side, but this financial situation does not require full-scale litigation to reach a resolution. Mediation can avoid the needless time and expenses involved in discovery, motion practice, and preparation for the trial.

A Mutually Agreeable Arrangement

The mediation process facilitates mutual interest-based negotiation rather than presenting a scenario where one party wins and the other loses the exchange. As a result, it is easier for all sides to live with the decisions reached through mediation, and the settlement is likely to hold up over time. Even if a dispute arises at a later stage, the chances of collaborative problem-solving are high because the parties will recognize the benefits of following a constructive approach. 

Consult a Mediation Attorney to Guide You Through Mediation

If you want to resolve a dispute quickly, economically, and reasonably, then you need to consider mediation over litigation. An experienced and professional mediation attorney can guide you through the mediation process and help you arrive at a settlement that is favorable to both parties. Anna Shapiro, Esq., and her team of expert attorneys at Shapiro Mediation are available to answer your questions and determine the best path forward for your unique situation. Call us today at (339) 298-7733 or contact us online to schedule a free consultation at our Massachusetts or South Florida office.