The Circuit Court of Cook County has established the Mortgage Foreclosure Mediation Program for homeowners interested in negotiating a modification of their mortgage payment after a foreclosure lawsuit has been initiated.
To be eligible for the Mediation Program, the property in foreclosure must be either a single family home or a building with four or fewer units. The homeowner must be living in the property. There are no income caps for eligibility. Involvement in the Mediation Program is not automatic. The owner must submit a motion to the court requesting that the case be sent to mediation. Appointment to mediation is at the judge’s discretion.
Once the foreclosure case is assigned to the Mediation Program, Chicago Volunteer Legal Services Foundation (CVLS) will be appointed to represent the homeowner for the purposes of the mediation. The Center for Conflict Resolution will send a notice to the parties with the date, time and location of the first mediation session.
There are two avenues for mediation: (1) retention of the property by the homeowner or (2) relinquishment of the property by the homeowner.
There are several retention options: (1) HAMP loan modification–where lenders receive incentives from the government to make loan modifications, (2) non-HAMP loan modification, (3) forbearance, (4) repayment or (5) Chapter 13 bankruptcy.
There are also several relinquishment options: (1) deed in lieu of foreclosure, (2) consent judgment, (3) short sale, and (4) relocation assistance.
Each of these options should be discussed with the CVLS attorney prior to the first mediation session to determine which one best suits the homeowner.
The homeowner must appear at the mediation session. The homeowner must also bring to the mediation session all financial documents submitted to the lender and any other financial documents which may influence the lender’s decision to settle the case. The mediation session usually lasts about ninety minutes and most of the time a second mediation session is scheduled.
During the mediation, the foreclosure proceeding is put on hold. However, CVLS will appear in court on a regular basis to advise the judge of the progress of the mediation. Depending upon the progress of the mediation, the judge will either extend the mediation order or send the case back to the trial call.