Mediation Program Offered to Homeowners in Illinois County

A new mediation program to help ease those affected by residential mortgage foreclosures will soon be available in Peoria County, Illinois. The program's anticipated start date is June 1.

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""This is an important step forward for those who have suffered the effects of our nation's economic crisis in Peoria,"" said Chief Justice Thomas L. Kilbride of the Illinois Supreme Court. ""The Supreme Court has a keen interest in programs that have the strong promise of achieving timely and lasting resolutions to tough problems.""

According to records of the circuit clerk, nearly 900 foreclosure cases were filed in Peoria County in 2010 and about 180 so far in 2011. Of those foreclosures, 90 percent are residential.

The program's goals are to reduce expenses sustained by lenders, borrowers, and taxpayers as a result of residential mortgage foreclosures; to reduce the number of court cases; and to help keep families in homes to prevent vacant and abandoned properties.

""Mediation has proven to be an effective tool in other areas such as family law and general civil litigation in resolving disputes in a fair and amicable manner, and we hope, likewise, that the Peoria County Mandatory Residential Mortgagee Foreclosure Mediation Program will prove fair, efficient, and effective,"" said Chief Judge Michael Brandt of the 10th Judicial Circuit.

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Brandt added, ""I am hopeful that both lenders and citizens caught in hard times will benefit by the program's central theme of resolving loan delinquencies.""

The program, approved by the Illinois Supreme Court, is modeled after one that began last June in Will County. Both programs operate with no expense to taxpayers and are sustained by an increase in filing fees paid by lenders seeking to foreclose.

Under the program guidelines, all complaints filed for residential foreclosure are scheduled for a mandatory pre-mediation conference. Along with the summons, defendant borrowers receive a form explaining the mandatory mediation program.

If the borrower meets initial criteria for a loan modification or wishes to surrender the property in a consent foreclosure or other arrangement, the mediator will schedule a mediation conference.

If the borrower does not meet the criteria or does not wish to keep the house, the mediator may seek to determine whether the borrower can deed the property to the lender or consent to a judgment waiving any deficiency judgment against the borrower.

If the borrower fails to successfully modify the loan or if no agreement is reached, the foreclosure will resume in the Circuit Court.

Chief Judge Brandt is compiling a list of qualified mediators, who are either retired judges or attorneys with a minimum of five years experience in the mortgage foreclosure field. Any mediator is prohibited from practice in residential mortgage foreclosure proceedings in Peoria County in any capacity.

""We view the program as win/win for lenders and the community,"" said Chief Judge Brandt. ""It is true that lenders are going to have to pay more in filing fees, but it should prove less expensive and less risky for them in the long run. We also hope the program will result in fewer abandoned homes over a shorter period of time with less downside for surrounding home values.""