Helping banks negotiate

Faced with the realization that there are expected to be up to 13 million foreclosures through 2012, Legislators are finally taking steps to ensure that the banks and servicers do not reject reasonable settlement offers from homeowners. New legislation being introduced in the Senate would mandate court-supervised mediation in all bankruptcy cases. In addition, it would not only require that an individual with full settlement authority and open to good-faith negotiations show up for mediation, but also allow courts to supervise settlement offers. The hope is that this will allow homeowners to get honest and straightforward answers regarding their loan modification requests and prevent banks from rejecting reasonable settlement offers.

In the current environment, banks and their servicers sometimes resist mediations. Even if the bank does agree to mediation, often the representatives sent to negotiate do not have full settlement power or are not willing to look outside the box for amicable solutions. While I am disappointed that this law would only apply to bankruptcy courts, and skeptical that legislators will be able to control a party participating in negotiations, I applaud the fact that someone is taking notice of the flaws in the system and attempting to correct the problems.

As with any piece of legislation, there are hurdles to overcome before being the law could be enacted. There is also strong opposition from opponents who fear giving bankruptcy courts greater power. While the current landscape remains difficult for homeowners, it could be a positive sign of things to come.

If you are facing foreclosure or debt related issues, don't go it alone.  Contact my office today for a free consultation, and employ a professional to negotiate with the bank on your behalf.