With inflation and the current state of the economy, millions of Americans are facing financial hardship. While it’s likely only temporary and finances will again improve for many, until that happens it can be easy to start falling behind on various bills, including your mortgage payments. Although this can lead to foreclosure proceedings, you may have options for staving off the process.
Certain states, counties, and cities offer a special type of mediation program for homeowners who are in foreclosure. Luckily, Rhode Island does participate in the foreclosure mediation program.
Alternative Dispute Resolution
Mediation in general is a type of “ADR,” or alternative dispute resolution, which helps parties to come to a negotiation or agreement with the assistance of a mutually selected, impartial, and neutral person (the “mediator”).
When it comes to foreclosure mediation, the program brings homeowners and foreclosing banks or lenders together to work out their foreclosure matter. It’s important to note that participating in foreclosure mediation (or mediation of any kind) does not guarantee the results you desire. However, you may be able to avoid foreclosure with a modification, short sale, deed, repayment plan, or other option.
The Foreclosure Mediation Process
Before the mortgage is 120 days delinquent and before foreclosing upon a property, the lender must provide the following:
- A notice about foreclosure;
- A notice about the foreclosure mediation program;
- Information about choosing the foreclosure mediation program; and
- Contact Information for low-cost legal services and HUD-approved housing counselors.
Under Rhode Island law, you have the right to a free, in-person or telephone mediation conference with an independent mediation coordinator to help you avoid foreclosure. Your bank/lender may not foreclose upon you unless you have been given the opportunity to participate in this mediation conference. Your mediation conference must be schedule within 60 days of the notice being mailed to you.
If you don’t respond to the notice or if you don’t cooperate with the program, the foreclosure process will proceed.
Will Foreclosure Mediation Prevent Foreclosure?
As mentioned, participating in foreclosure mediation does not automatically mean that you will avoid foreclosure; you could still end up having your home foreclosed upon. However, participating in foreclosure mediation definitely increases your chances of avoiding foreclosure. Therefore, there is no reason why you wouldn’t at least engage in the conference. At the very least, the program will buy you some extra time in your home before you are foreclosed upon.
Palumbo Law Helps Those in Rhode Island with their Real Estate Needs
The threat of foreclosure on your home can be devastating, confusing, and complicated. This is why it’s so helpful to consult with a knowledgeable and experienced Rhode Island real estate attorney who knows the ins and outs of foreclosure and the foreclosure mediation process.
At Palumbo Law, our experienced Rhode Island Real Estate lawyers will walk our clients through the foreclosure mediation process. To learn more or to schedule a free consultation, call us today!