On September 19, 2010, the New York Times published an article titled “When Mortgage Mediation Is a Gamble” by Gretchen Morgenson. In it, she described some of the pitfalls of Nevada’s foreclosure mediation program. Most of the time we think of mediation as a low-risk endeavor: there isn’t much to lose in a process where you control your own destiny and carefully weigh for yourself whether or not to enter into an agreement.
In fact, here the problems are with the overall administration of the program more than with particular mediations themselves. The first problem involves the mandatory nature of the program. Although a lender is required to attend the mediation session if the homeowner requests mediation, the lender appears to suffer no consequences if it fails to come with the necessary documentation and information that would make a successful mediation possible. If one party comes to a mediation unprepared to discuss a resolution of the case, it’s even worse than a waste of time. To the other side, such behavior can indicate a lack of good faith.
Next time: more on the Nevada foreclosure mediation program.
