LLA Members Assist with Mortgage Diversion Program
In July 2010, with the participation of North Penn Legal Services, the Lycoming Law Association, and the STEP Housing counseling office, the Lycoming County Courts developed a mortgage foreclosure diversion program for Lycoming County residents. This program was designed to give residents the option to have their mortgage foreclosure case reviewed by the court prior to final judgment being entered. This review is conducted by a court conference where all parties are present and the goal of the conference is to save the property from foreclosure.
In 2009, Congress made several programs available to the homeowner as alternatives to foreclosure. The Lycoming County Diversion Program is intended to provide delinquent homeowners with an opportunity to take advantage of these programs. The goal was to offer alternatives short of sheriff sales.
The LLA expanded its pro bono work to assure pro bono legal representation to the homeowner at these foreclosure conferences. Their contribution along with the contribution of STEP Housing counseling office was essential in assisting the homeowner in filing the proper paperwork to pursue one of these alternative programs. The STEP Housing counselor attended all of the diversion conferences. The court has conducted 59 diversion conferences involving 44 separate cases. At the end of the first year, on average, 58% of the closed cases have resulted in settlement agreements that allowed the homeowners to keep their homes. This type of settlement avoided the sheriff’s sale process for each of these homeowners.
With the recent economic tightening, federal money may not be available in the future.
Judge Richard Gray recently presided over a session of mortgage foreclosure court where 5 cases were resolved in one afternoon, largely mortgage modifications done by the lender and good faith effort by homeowners. Judge Gray believes the program enables banks and homeowners to meet in an environment that facilitates settlement and communication.
The assistance of LLA lawyers is essential to the success of this program.
