Some states, including Delaware, offer information services to homeowners facing imminent foreclosure. Mediation needs the owner (the borrower), the lender, and the impartial broker to find a way to escape foreclosure. While you don’t have a specific outcome while you’re engaged in mediation, you might find a way to stay home or move away from the property.

Mediation is usually an efficient form of dispute resolution. In the foreclosure solution, the borrower and the loan lender negotiate with a neutral broker to resolve the mortgage default.

Mediation helps you contact your lender and discuss a joint agreement to avoid foreclosure. The following steps are taken by the homeowners of Delaware who have been active in the referral program:

Stay at home:

1. Loan Modification – Agreement to modify one or more of the mortgage contract terms to make payments easier for you.
2. Repayment of the loan: the creditor gives you a fixed period to repay the regular loan balance by adding a portion of the amount due.
3. Forbearance Agreement – The interest payment may be reduced or postponed for some time. You shall resume regular payments at the end of the term and pay for the restructuring of your loan a lump sum or additional partial costs for several months.

Get the out of your house:

1. Short sale: You can persuade your lender to sell your own home and agree to accept a default between the sale price and the mortgage balance.
2. Deed: You will voluntarily transfer your property to your lender to pay off your mortgage’s remainder.

Under Delaware law, most restitution borrowers are responsible for mediation.

Qualifications for participation. If the mortgage is based on one to four units and the borrower’s principal place of residence, the borrower will be automatically referred to a foreclosure settlement.

Please note that mediation does not negate your responsibility to respond (if you wish to reply) to a foreclosure complaint. You may receive information from a local lawyer to respond to a lawsuit or represent you in mediation or seizure. For more information on alternative forfeitures, please contact your HUD Approved Housing agent.

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