Law for Compulsory Mediation and Preservation of Your Home in Foreclosure Proceedings on a Main Residence
The U.S. Department of Housing and Urban Development (HUD) requires customers interested in securing a Reverse Mortgage loan to participate in a counseling session offered by a housing agency certified by them.
It establishes in the courts a mechanism of mandatory mediation for financial institutions in order to ensure that the mortgagor is aware of all the alternatives available in the market to which he/she is eligible, so that they can avoid the foreclosure or the court-ordered sale of a residential property that constitutes the main residence of the mortgagor.
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The mediation process shall be a jurisdictional requirement in actions over foreclosure secured by residential property. Failure by the mortgagee to comply with this requirement shall prevent the court from issuing a judgment or ordering the court-ordered sale.
The mediator shall not offer legal or financial guidance and shall maintain impartiality throughout the process.
A mediator will encourage the mortgagee to explain to the mortgagor the available alternatives to which he/she is eligible and that could avoid foreclosure or a court-ordered sale.
