Combating the Foreclosure Crisis October 11, 2012
Overview • Mediation Program • Servicer and other outreach events • Enforcement Initiatives
Mediation Program Nuts and Bolts • Established by statute • Administrative Directive • Eligibility • Mediation is an automatic, opt-out program • Conciliation style mediation • Program reliant on HUD approved housing counselors to assist homeowners
Mediation Program • Program is run by the Superior Court • President Judge Vaughn is the point person in the Court • Linda Carmichael is the liaison • Sharon Agnew and other Prothonotaries are also involved • Delaware Dept. of Justice, Program Administrator • Administers the day-to-day running of the Program and the conferences • DVLS arranges for and assigns mediators • JackiChacona is currently serving as the sole mediator • DSHA manages the mediation account and distributes reimbursements to housing counseling agencies and the DOJ
Mediation Program • Goals of the new Mediation Program: • Preventing unnecessary foreclosures • Giving Delaware homeowners an opportunity to have a meaningful conversation about possible non-foreclosure alternatives • Establishing a single point of contact with servicer • Housing Counselors play a large role: • Assist homeowners with navigating the loan modification process; • Guide and support homeowners through the mediation conference; and • Spearhead negotiations with the lender and lender’s counsel.
Mediation Program Statistics • 136 eligible foreclosure actions, representing 24% of all foreclosure actions filed statewide since the inception of the program; • 30 homeowners have filed certificates indicating a desire to participate in mediation; • 34 mediation conferences have been held; • 15 cases have been continued pending further negotiations or have reached a non-foreclosure resolution through mediation; • 93.33% of the cases which have been continued or resolved involved a housing counselor; • 19 cases have proceeded on to judicial foreclosure, 90% of these due to failure of the homeowner to appear for scheduled mediation; • Overall, the Mediation Program has a 59.37% participation rate.
Servicer Events And Other Outreach
Servicer Events • Quarterly events • Since 2009 we have held over 25 workshops bringing together lenders, homeowners, housing counselors, and representatives of the Attorney General’s Office • Workshops provide information about programs available to assist struggling homeowners • Facilitate on-site face to face meetings between homeowners and mortgage servicing banks
Next Servicer Events • WEDNESDAY, NOVEMBER 14, 2012 • Session #1 First State Community Action Center 308 N. Railroad Avenue Georgetown, DE 19947 Outreach from 11:00am to 2:00pm Educational Presentation beginning at 12:45pm • Session #2 Milford Senior Center 111 Park Avenue, Milford, DE 19963 Outreach from 5:00pm to 8:00pm Educational Presentation beginning at 6:30pm • THURSDAY, NOVEMBER 15, 2012 • Sheraton Wilmington South 365 Airport Road New Castle, DE 19720 Outreach from 11:00am to 8:00pm Educational Presentations at 12:30pm and 6:00pm
Community Outreach • The Office of Foreclosure Prevention and Financial Education • Monthly town hall meetings in all three counties • Information and resources for struggling homeowners • Review of assistance programs • Information regarding loan modifications • Tools to avoid foreclosure rescue scams
Mortgage Fraud • Scope of Enforcement • Individual Mortgage Brokers • Foreclosure Rescue Scams • Improper Mortgage Servicing Activities • Deceptive Practices related to the Ownership of Mortgages • Abuses related to the Securitization of Mortgages
MERS Lawsuit • Allegations • MERS obscures important information from borrowers and what is available to borrowers is frequently inaccurate. • MERS acts without authority • MERS is a “front” organization that does not enforce its own rules • Settlement Terms • Creating an easy way for homeowners to find out who owns their mortgage. • Reducing the chances of fraudulent foreclosures. • Increasing the transparency of the foreclosure process. • Improving the accuracy of MERS’ records. • Increasing oversight and training.
Bank of New York Mellon/Bank of America Litigation • Litigation in New York State Court seeking judicial approval of a proposed $8.5 billion settlement involving 530 different residential mortgage backed securities trusts • If approved, settlement would resolve investor claims related to breaches of the agreements governing the trusts at issue • Protecting the interests of unrepresented Delaware investors and homeowners and the integrity of the market as a whole • Additional transparency from the parties seeking judicial approval of the settlement
Ongoing Enforcement Efforts • The Delaware DOJ continues to pursue cases in this area • Investigate allegations of improper conduct in the mortgage space • Use of national mortgage settlement funds to combat financial fraud
National Mortgage Settlement • $26 billion settlement • Joint state-federal investigation • Delaware Department of Justice served on the executive committee of investigating attorneys general • Settlement resolved claims related to improper mortgage servicing practices of five largest mortgage servicing banks in nation • Delaware’s share of settlement approximately $11.7 million
National Mortgage Settlement • Funds to support: • Enforcement • Education and Outreach • Mediation program
Thank You! Please feel free to contact me if you have questions. My contact information is below: Gregory C. Strong Director, Consumer Protection Unit Deputy Attorney General 820 N. French Street Wilmington, DE 19801 (302) 577-8504 Gregory.Strong@state.de.us