Foreclosure Mediation Legislation Referred to Senate Judiciary Committee

Sen. Sheldon Whitehouse (D – Rhode Island) has introduced legislation that would provide bankruptcy court judges with the option to require homeowners undergoing bankruptcy and their lenders to engage in foreclosure mediation. According to DS News magazine,

Whitehouse’s proposal is modeled after a court program in his home state of Rhode Island. He says it would not give judges the power to slash mortgage debt like the many bankruptcy cramdown measures that have fallen short, but instead would force lenders to open up the lines of communication to find a solution that is in the best interest of both homeowners and investors.

Whitehouse’s bill — Limiting Investor and Homeowner Loss in Foreclosure Act (S. 222) — was referred to the Senate Judiciary Committee, of which he is a member, last week. The full committee held a hearing Tuesday on bankruptcy court foreclosure mediation programs and how the approach might be used to “cut through the red tape” and bring the homeowner and their mortgage company together “for a good faith negotiation,” according to Whitehouse.

The entire article may be read here.

For a list of foreclosure mediation programs across the nation, see the National Consumer Law Center‘s Foreclosure Mediation Programs by State. Additionally, foreclosure mediation bills are currently before the legislature in South Carolina and Washington state.

Disputing previously discussed foreclosure mediation programs operated in Hawaii, Connecticut, Florida, Nevada and the District of Columbia.

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