Now in its third year, the Foreclosure Prevention Pro Bono Project (FP) has added a new dimension – a mediation program. In response to a new foreclosure mediation law, effective July 1, 2010, this volunteer lawyer foreclosure training and pro bono service program has expanded its expertise to include foreclosure mediation training and representation. On July 29, FP began training its cadre of 1,096 volunteer lawyers to acquaint them with the latest updates in the state’s foreclosure laws.
The new 2010 foreclosure mediation law and accompanying rules, hailing from HB 472, once again change the foreclosure legal landscape in Maryland. The recession and resulting foreclosure crisis drove the 2008 Maryland General Assembly to pass foreclosure emergency legislation, effective April 4, 2008, which established new notice requirements and extended time periods for foreclosure sales to give homeowners a better chance of salvaging their homes and stabilizing their finances. Now, additional laws have been instituted to address the foreclosure crisis which continues to plague Maryland homeowners.
The newest 2010 law gives homeowners the opportunity to go to mediation before the lender can proceed with the foreclosure sale. It also requires lenders to send borrowers a loss mitigation application along with information about housing counseling services and a Maryland foreclosure timeline at least 45 days prior to filing a foreclosure action. It also affords borrowers the opportunity to request a non-binding mediation session with their lender or representative to explore alternatives. This comprehensive new rule once again alters the practice of foreclosure law in Maryland, so training is needed for all existing and new lawyers volunteering through FP to assist homeowners facing foreclosures.
FP was created in July 2008 when the foreclosure crisis hit a record level in Maryland, and following the enactment of new laws. To help the thousands of homeowners hit hard by the crisis, Chief Judge Robert M. Bell, Court of Appeals of Maryland, issued a call to action, asking all Maryland lawyers to volunteer to help homeowners facing foreclosure. Lawyer volunteers are a key component of the Foreclosure Prevention Pro Bono Project overseen by MSBA’s pro bono arm, the Pro Bono Resource Center of Maryland (PBRC), in conjunction with Civil Justice Inc., the Maryland Department of Housing and Community Development and many others. FP trains the volunteer attorneys, who then accept pro bono foreclosure cases to assist distraught homeowners and provide brief free legal advice to homeowners at public events.
Two years later, this successful pro bono project has trained 1,000+ Maryland lawyers in foreclosure law and this ensemble has helped thousands of homeowners facing foreclosure. Since FP’s inception, the participating volunteer lawyers have provided legal counsel and guidance to 1,587 homeowners at the 60+ foreclosure solutions workshops that FP has held across Maryland, and many volunteer lawyers continue to counsel and assist the homeowners they met at the workshops. In addition, FP has placed 973 homeowner foreclosure cases with volunteer attorneys.
There are five pro bono referral agencies which play a major role in FP, placing foreclosure cases with volunteer attorneys across the state. These include Allegany Law Foundation; Community Legal Services of Prince George’s County; Maryland Volunteer Lawyers Service; Montgomery County Lawyer Referral and Mid-Shore Pro Bono, Inc.
PBRC has been tracking the success and outcomes of the homeowner cases and, according to Jennifer Larrabee, PBRC’s Director of Volunteer Services and Manager of the Foreclosure Project, “of the outcomes reported to date, where the clients and attorneys are still involved in representation, 85 percent have been positive, including loan modifications; forbearance agreements; repayment plans; short sales with deficiency waivers; and ‘cash for keys.’ Plus, 98 percent of homeowners assisted at foreclosure solutions workshops have rated that assistance as ‘helpful and useful.’”
The extensive foreclosure training FP offers to all interested volunteer attorneys, through live and electronic instruction sessions, is one of the keys to its overall success. The other key lies in the committed volunteer lawyers themselves, who genuinely want to help these poor families and often assist multiple homeowners. Now, in addition to the basic and advanced educational programs FP offers, it has added foreclosure mediation training to advise lawyers on updated new foreclosure mediation rules and regulations.
PBRC and Civil Justice initiated foreclosure mediation training for lawyers in July and to date 72 existing FP volunteers have received training concentrated in Maryland’s new foreclosure mediation process.
In exchange for free training, these volunteer attorneys have committed to pro bono representation of two homeowners in their mediation sessions and/or pro bono representation at one mediation and attendance at one foreclosure solutions workshop where homeowners receive free legal advice about possible solutions to their mortgage issues. Participating attorneys will have access to malpractice insurance and mentoring support.
“The new law will change the way we counsel homeowners,” explains Larrabee. “The mediation is voluntary, so homeowners must request it, but those choosing mediation will have the opportunity to meet face-to-face with their lender and negotiate alternatives to foreclosure in the presence of a neutral third party – in this case, an Administrative Law Judge. The partners in the Foreclosure Project have not missed a beat in preparing the volunteer lawyers for this change so that Maryland homeowners will continue to benefit from free legal advocacy in battling foreclosure.”
The foreclosure crisis in Maryland persists. In the second quarter of 2010 alone, there were 15,637 foreclosure filings in Maryland, putting Maryland among the 11 worst states in the nation. The foreclosure mediation law offers a new tool in the fight, and it is anticipated that thousands of homeowners will take advantage of this tool. They need legal counsel, however, to ensure the best possible outcome and a sustainable solution to their mortgage issues.
Maryland attorneys are still needed and can receive free training in exchange for a pro bono commitment. PBRC offers online training so that attorneys can undergo training at a time and place convenient for them. To register for training, please contact Jennifer Larrabee, Esq., at firstname.lastname@example.org, or call (410) 837-9379 or (800) 396-1274.