Mandatory Mediation is here!

http://attorneygeneral.delawar…..am1-18.pdf

Anyone care to comment?

There are other links to the details like $500 fees by banks to file the mediation.   Are these fees passed on to the homeowners?

I honestly think it is just going to delay the inevitable.  Most the people I come across have already moved out of the house so it's no longer their primary residence or they simply can't afford the house anymore (out of work, drastic drop in income) which I don't see how mediation can help.  For some people, it may help but I think what will probably happen is either the homeowner will not show up for the mediation (embarrassment, not receiving notification, just don't care, etc.) or they will show up but the lender will not be able to help them and the foreclosure will proceed anyway.  I just spoke to a woman Friday who was foreclosed on in 08/08 and the property is just going to sheriff's sale next month.  I don't know how the bank and the homeowner would be able to come to an amicable resolution after it being a non performing asset for 3+ years.  For the sheriff's sale gurus like you Brian, you may see a slight drop in what's available but eventually I think there will be a flood of properties once the mediation fails because the lender will probably put the gas on getting rid of them.  The more I think about it, I think we probably will see more situations like that lady I spoke to.  The banks will probably take forever to set up the mediation.  Once that finally occurs and fails, then they will file foreclosure but how many months will probably have passed with no payments being made – 12, 18? Then you have another 6-12+ months for the foreclosure to get to the sheriff's sale.  Just a thought. 

Thanks to a few of my favorite Realtors last Christmas, I can proudly say, "yes, I do have a crystal ball".   When in need of sheriff sale predictions, I shake it, recite an incantation, and poof, out comes answers to all the secrets of this business.  Here's what the great ball of wisdom predicts:

1.There will be a mob of somewhat peaceful people protesting the next NCC Sheriff Sale.  Possibly in some sort of Valentine's Day theme.   Doubtful that yodeling will be involved or even off-key singing, but some statement nonetheless.  It would be nice to hear a "thank you Mr. Attorney General" but doubtful that will happen.

2.Of the 350+/- properties listed, less than 100 will go to auction.   This will be less than the somewhat statistical 1/3.   The reduction will be due to the mandatory mediation.  The $500 set up fee will be passed on to the homeowner.

3.Subsequent sales for the next 3 months will be reduced to the 75-100 range (those actually being auctioned).

4.In 2-6 months, banks will wise up and realize that short sales are good.   Unfortunately, it will take longer for PMI backed loans to get on board and create a short cut to pay the mortgage company without going through the foreclosure process.

5.Real estate investors will catch on an reduce their asking prices an additional 10-20%.   Banks will accept more short sale offers .   (this would be a great statistic to track—any Realtors interested and able to share this data?)

6.Forced placed insurance companies and property maintenance companies will make a bundle by having an extra 6 months or so of coverage and maintenance. (another opportunity to buy stock)

7.Savvy non-paying homeowners can work the system–not just for an extra 6 months but possibly 1-2 years through strategic mortgage mods followed by bankruptcy filings.

8.The presidential elections will be over in November and business will either boom or wither.

(Jason,  you are welcome over to my office any time to consult the great orb.   I am sure you will appreciate the irony when you see it.)

On a more serious note, those who work with pre-foreclosure deals should see an opportunity here in that the State seems to support short-sales.  Imagine an emotional homeowner in a room with a bank representative and a state appointed mediator.   The homeowner presents a (albeit lowball) short sale offer and the Bank says no.   Wouldn't the mediator have a responsibility to have the 2 come to terms?

I don't typically work in the pre-foreclosure end of the business.   But, I am interested in keeping this thread open for discussion so others may bounce ideas off each other.  Wouldn't it be ironic for Mortgage Rescuers be the very ones who sit down with Homeowners and the Mortgage Moderators to work out amicable deals?

Brian, something definitely has changed.  We are finding all of our short sales with Bank of America are pretty much sitting in limbo.  About 6-9 months ago, they were impressively moving through files in 30-45 days but now we have files that are just sitting – no negotiator assigned or evaluation of files, etc.  Don't know if this has anything to do with the mediation process but a definite noticeable change.  I personally was hoping the mediation process would cause for the negotiators to work through files faster as the mediation process was just going to drag things out which ulitimately meant less money for the banks to recoup.  Hopefully things pick up a bit.