Monday, December 01, 2008

Philly's Foreclosure Diversion Program Explained to State Reps Dally & Brennan

Last Monday, Northampton County Council member Lamont McClure conducted an informative meeting concerning the local impact of the nation's home foreclosure crisis. Interestingly, state house members Craig Dally and Joe Brennan met the very next day with Judge Annette Rizzo, who supervises Philly's Residential Mortgage Foreclosure Pilot Program.

Dally has been kind enough to send me some information that he and Joe obtained from Judge Rizzo, and I'll share it with you.

Here's how it works. When a foreclosure action is filed, the bank must indicate whether an owner-occupied property is involved, and if so, obtain a case management order scheduling a conciliation conference. Both the complaint and the conciliation order, scheduling a conference within sixty to ninety days, are then served on the homeowner. Before the conference, the homeowner meets with a housing counselor, who prepares a proposal for the lender.

Using this procedure, 1,540 cases have been scheduled for a conciliation conference. More than half of the eligible homeowners, 63%, participated. Of the 973 owners who have completed conciliation conferences, nearly half (490) have been able to save their homes.

Philly is using a large reservoir of pro bono attorneys to keep costs down.

5 comments:

Anonymous said...

For the most part, this process addresses my concerns. The only remaining one is the homeowner stretching out the process by re-scheduling the Conciliation Conference over and over again. As long as strict time frames are adhered to, it works.

As an aside, this is how community bankers have been doing things for years, without courts or the government telling us to.

The Banker

Anonymous said...

Banker is right. It's why community banks are still able to lend and want your business. I've had a very recent experience that differs greatly from the sky is falling news reports. A little communication goes a long way.

Anonymous said...

Unfortunately not everyone has a morgage with a community bank. Looks like McClure is on to something I hope he will have the same success here as they have had in Philly. This could be the most important thing acco,plished by the County my prayers are with them in getting this done.
BO I'm sure you'll find some way of attacking McClure over this anyway we'll be waiting.

Bernie O'Hare said...

I'll be the first to admit that, when I saw this on the agenda, I thought McClure was just pandering for votes again, trying to appear as though he cares. But I was wrong. McClure came to his meeting well-prepared, brought very informative people with him, and conducted the best committee meeting I have seen in several years. It was good government.

I probably will find reasons to criticize him in the future, but can only commend the way he has handled this issue.

Anonymous said...

Anon 10:00pm, you're right that not everyone has a mortgage w/ a community bank. But hopefully people will learn that where they bank is important.

I'll also admit I was very skeptical about Philly's plan, but it looks very solid. And I agree w/ Bernie, kudos to Mr. McClure.

The Banker