Friday, April 25, 2008


HAROLD BRUBAKER, PHILADELPHIA INQUIRER Philadelphia judges, advocates for borrowers, and attorneys for lenders have developed a pilot program they hope will slash the number of mortgage-foreclosure sales in the city. . . A key component is a timeline requiring mortgage companies to respond more quickly to proposals made by housing counselors on behalf of borrowers in default on their mortgage payments. . .

For owner-occupied properties, a "conciliation conference" between the borrower, an advocate for the borrower, and an advocate for the lender will take place 45 days after the foreclosure filing. Homeowners must meet with a housing counselor at least five days before the conference to complete a proposal to deal with the mortgage default.

On July 1, sheriff's sales of owner-occupied properties that could not be saved by the conciliation process are expected to resume. If homeowners do not respond to notices or do not appear at their scheduled conciliation conferences, the lender may proceed with the foreclosures

A sticking point between advocates for lenders and advocates for homeowners remains whether there should be an affordability standard for resolving a default.

Advocates for borrowers proposed a standard 45 percent ratio of debt payments to monthly income, so that defaulted borrowers receive the same deal no matter who represents them or who supervises their conciliation meeting.

There would have been exceptions to that - for example, if the lender could show that high credit card debt was the reason the borrower could not afford the mortgage, said Ian Phillips, Pennsylvania legislative director for the Association of Organizations for Reform Now, an advocacy group known as ACORN. The advocates still hope to win a standard.


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