Mortgage Foreclosure Mediation Program
In response to the surge in foreclosure cases in recent years, the CBF and other partner organizations worked with the Circuit Court of Cook County to launch the Mortgage Foreclosure Mediation Program. This innovative Program provides free housing counseling, legal assistance, and mediation services to Cook County homeowners and families in foreclosure and is designed to help homeowners resolve their mortgage foreclosure cases in the most fair and effective manner possible.
Since the Program’s launch in 2010, tens of thousands of homeowners across Cook County have benefitted from the resources and services provided throughout the Program and helped them to better understand the foreclosure process and resolve their foreclosure case in the most fair and efficient manner possible. Many have saved homes and all have increased confidence that they received a “fair shake” during the process.
With funding from Cook County, people facing foreclosure have access through a central help line to free housing counseling, brief legal assistance, and community education. In appropriate cases, they also have access to mediation to help them reach an agreement with their lender either to modify their loan and stay in their home or otherwise to resolve their case in as fair and dignified manner as possible.
The CBF was a partner in the development of the Program and from its start has managed the legal and mediation components in partnership with three grantee organizations described below. The CBF has donated all of its time and resources necessary for its role in the Program and provided significant other monetary and non-monetary resources.
Advice and Brief Legal Assistance in the Court—Chicago Legal Clinic
The Chicago Legal Clinic (CLC) provides core legal advice and assistance to homeowners facing foreclosure at several locations at or near the Daley Center. Since the Program began, nearly 100,000 homeowners facing foreclosure have received free legal advice and assistance completing court documents and forms through the Program.
These services provide a number of benefits to the homeowners and the Court and, because foreclosure is a complex judicial process, are critical to the Program’s success. Lawyers at the Advice Desk perform a legal “triage” that helps determine whether homeowners may have a legal defense to the foreclosure. Lawyers explain the homeowner’s legal rights and responsibilities, explain the court process to them, and help them complete the necessary legal forms to navigate what can be a very complex and daunting court process to a layperson. In addition, the availability of these free services gives homeowners legitimate options to counter the rampant number of scams being perpetrated on unsuspecting homeowners in our communities and thereby helps combat fraud.
Mediation Services—Center for Conflict Resolution
The Center for Conflict Resolution (CCR) provides the core mediation services for the Program, including management and oversight of the mediations and recruiting, training, and supporting a dedicated corps of mediators. Mediation is an opportunity for both the lender and homeowner to sit down with each other to discuss the legal issues in court and attempt to identify a possible solution amenable to both parties. Since the Program’s inception in 2010, CCR has scheduled and conducted over 7,000 mediation sessions. One out of three homeowners participating in mediation has been able to save their homes. The overall satisfaction rate for all parties participating in the mediation process (homeowners, lenders, and attorneys) has consistently been in the 95% range since the Program’s launch.
Legal Representation in Court and in Mediation Sessions—Chicago Volunteer Legal Services
Chicago Volunteer Legal Services (CVLS) provides pro bono representation to borrowers in the mediation sessions and in associated court hearings. Since the Program’s launch, CVLS has received over 5,800 referrals to provide free legal representation to homeowners in the mediation process. Legal representation for the homeowners in the mediations is critical to the success of the Program, as it involves navigating a complex judicial proceeding in which the lenders always are represented by counsel. Having representation in the mediation sessions levels the playing field for the homeowner, helps homeowners obtain and submit all documents and related evidence necessary to reach settlements, and helps ensure accountability for lenders in these proceedings. CVLS leverages thousands of hours of free legal services donated by over 300 trained pro bono attorneys so that low-income homeowners are well-represented throughout the mediation process, supported by a relatively small number of CVLS staff attorneys.
More than one out of every two households—or more than 50%—who enter the mediation phase of the Program reach an agreement with their lender. That agreement could be to save the home through modification of the loan, or it could be an agreement to transfer ownership of the home to the lender.
The legal and mediation aspects of the Circuit Court’s Mortgage Foreclosure Mediation Program have proven to be very successful and extremely cost-effective since the Program’s launch. The program already has helped tens of thousands of people facing foreclosure while efficiently utilizing hundreds of volunteers and leveraging significant additional resources from the CBF and others.