Tuesday, March 3, 2009

Foreclosure Mediations on Hold

It seems that foreclosure mediations have been put on hold. Why would anyone put this off? They are waiting for the March 4th. Why are the waiting for March 4th? That is when the new administration's Borrowers about the Homeowner Affordability and Stability Plan eligibility details are announced. Of course this means we will have some information tomorrow. But for today we will take a look at this article from The National Law Journal titled Attorneys say foreclosure prevention program is stalling settlements, mediations. Lets take a look -

Lawyers say President Barack Obama's new mortgage foreclosure prevention program, the Homeowner Affordability and Stability Plan (HASP), is stalling settlement of mortgage foreclosure litigation, bankruptcy actions and mediations.

Joy Harmon Sperling, a partner in the Florham Park, N.J., office of Day Pitney's consumer finance and creditors' rights practice area who represents mortgage lenders, said borrowers' attorneys have been declining settlements since the Treasury Department's announcement.

"There are cases I was close to settling where the borrower said, 'I don't want to settle, I want to see what I can get from the president,' " Sperling said.

The HASP appears to do or encourage what a lot of homeowners and their lawyers are trying to do through litigation.

"It gives homeowners potentially a stronger hand," Wertheim said. HASP has definitely slowed settlements of foreclosure cases, said Chris R. Arthur, a lawyer in the Charleston, W. Va., office of Samuel I. White P.C., a Virginia Beach, Va.-based boutique that specializes in representing secured creditors. Arthur said he's not sure whether putting the brakes on the process is a good thing or bad thing, but he's recently postponed mediation of a foreclosure matter because his client wants to see how the government programs affect the case.

In bankruptcy cases, bankruptcy lawyers are assessing whether access to a HASP program will help bankruptcy petitioners keep their houses, Arthur said.

There is already a line of people waiting to test the program. Then there will be another line of people (like us) waiting to analyze how the program is really working. Is the program really helping people it was intended to? Will the program be easily implemented or will it be another dud (see Hope Now)? Or are we just throwing more good money after bad - but hey at least the funds are being spread beyond Wall Street this time - huh. While we really do not want to wait and see, we must.

And since there already is a line of people waiting to test the new program hopefully we will not have to wait long for results. We expect lenders to see throngs of people over the next few days...

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