Some observers have noted that mediation could be useful to homeowners and lenders who are caught in the grips of the current foreclosure problems in the residential housing market. Finding a solution that keeps people in their homes and a flow of payments continuing to lenders can be in the best interests of both parties. Neither party “wins” in a foreclosure action.
In any mediation, the presence of all the parties necessary to commit to an agreement is vital. In the foreclosure context, a potentially tough obstacle is the ownership of these loans. Most are owned not by the local servicing company but by remote investors who own bundles of loans. At one time, the necessary parties to an effort to change the terms of a loan could be a homeowner and a bank representative working in a home-town branch. If, instead, the entity that has the ability to modify the terms of a particular loan holds many loans, services them through another entity, and has no presence in the area where the home is located, the challenge of bringing the right parties to the table may be as great as finding a resolution in their best interests.