December 10, 2008
The Mortgage Mediation Act
By Senator Lena C. Taylor
I strongly believe that home foreclosure crisis can be remedied. Which will ultimately keep our neighborhoods strong and devoid of blight resulting from vacant properties.
In response to this crisis I have proposed the Mortgage Mediation act that would require a very important first step in the foreclosure process. This act would require the lender to give the homeowner notice of the right to mediation. The current Wisconsin foreclosure process is complex, time consuming and costly for both borrowers and lenders. This legislation would ensure that even if a settlement cannot be reached, mediation efforts would assist both parties in creating a plan to streamline proceedings, avoid unnecessary delays, and potentially shorten the foreclosure process by up to 15 months.
When performed successfully, this mediation has the ability to keep more people in their homes, lower our rates of foreclosures, and significantly reduce the courts time and workload involving these cases. The Mortgage Mediation Act is modeled after the successful “Farmer-Lender Mediation Act” adopted by the Minnesota Legislature in 1986 to tackle the farm crisis, helping to save over 14,000 farms from foreclosure.
This legislation is a brain trust of numerous stakeholders in the community, who are deeply concerned about the nationwide foreclosure crisis and the mandate from the federal government for states and municipalities to find creative ways of reducing the impact on our neighborhoods and ultimately, our tax base.
As chair of the Senate Committee on Judiciary, Corrections, Insurance, Campaign Finance Reform, and Housing I have sought the involvement and input of other elected officials, including the governor, state agencies, and interest groups in crafting this proposal to fully appreciate the concerns of all persons and parties in the foreclosure process. Together, we can build a strong front to take foreclosures head on.