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October 11, 2012 Combating the Foreclosure Crisis 1.

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Presentation on theme: "October 11, 2012 Combating the Foreclosure Crisis 1."— Presentation transcript:

1 October 11, 2012 Combating the Foreclosure Crisis 1

2 Overview Mediation Program Servicer and other outreach events Enforcement Initiatives 2


4 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 4

5 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 Jacki Chacona is currently serving as the sole mediator DSHA manages the mediation account and distributes reimbursements to housing counseling agencies and the DOJ 5

6 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 lenders counsel. 6

7 Foreclosure Timeline 7 3-4 months behind Letter of Default Notice of Intent to Foreclose (45 days before suit) Foreclosure Suit filed Service of Complaint by Sheriff Notice to Lien Holders for posting Mediation Conference Scheduled Homeowner to meet with Housing Counselor & complete COP Homeowner submits documents 14 days before conference Lender submits checklist of missing docs 7 days before conference Homeowner files an Answer or responsive pleading Appearance and participation in mediation conference Complete a Mediation Record Reduce any non- foreclosure agreement to writing Proceed accordingly based on outcome of conference

8 Foreclosure Data 8

9 9

10 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. 10


12 Servicer Events Quarterly events Since 2009 we have held over 25 workshops bringing together lenders, homeowners, housing counselors, and representatives of the Attorney Generals Office Workshops provide information about programs available to assist struggling homeowners Facilitate on-site face to face meetings between homeowners and mortgage servicing banks 12

13 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 13

14 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 14


16 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 16

17 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. 17

18 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 18

19 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 19

20 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 Delawares share of settlement approximately $11.7 million 20

21 National Mortgage Settlement Funds to support: Enforcement Education and Outreach Mediation program 21

22 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 22

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