EVELYN J. HERRERA Esq. MEDIATOR
Oakland, CA 94612
ph: (510) 893-3711
While some people seem to enjoy a fight, most of us dread conflict. And just about everybody hates the idea of going to court. Yet our society is swimming in lawsuits, which are both costly and time-consuming. And worse, they often leave both parties unhappy with the results.
But there is an alternative: mediation. In mediation, a neutral mediator helps the conflicted parties discuss the issues and seek a resolution. The benefits of mediation are not limited to reducing litigation costs. Through mediation both parties keep more control of the process and out-comes; there is more chance they can preserve and even improve their relationship; they save time spent in tedious court proceedings; and in general they stand a better chance of getting more of what they want. And, an astounding eighty-five percent of all mediations result in a settlement, according to the American Arbitration Association.
Why is the better, the more efficient process, still called the alternative? That is changing now as many court systems embrace mediation - including Alameda County Superior in California. In February of 2009 Alameda County Superior rolled out a case referral system to practitioners of alternative dispute resolution methods. For more information, go to: https://apps2.alameda.courts.ca.gov/adr/.
Mediation Week celebrates the process of finding cooperative solutions to conflicts. A statewide program now in its second year, Mediation Week, from March 16 – 20, is designed to highlight the benefits of mediation as a process for conflict resolution.
Mediation was introduced to the United States legal system 25 years ago. Yet even though the vast majority of lawsuits are resolved before trial, mediation still hasn’t caught on as the best –and cheapest – way to resolve conflicts. It is not uncommon for the attorney's fees, expert witness fees, jury fees, court reporter fees and other related costs to exceed the amount in a dispute, according to Michael Roberts. (“Why Mediation Works,” by Michael Roberts, August of 2000 on Mediate.com).
Mediation can not only save time and money, but also aggravation. "Traditional litigation is a mistake that must be corrected. . . . For some disputes trials will be the only means, but for many claims trials by adversarial contest must in time go the way of the ancient trial by battle and blood. Our system is too costly, too painful, too destructive, too inefficient for really civilized people." Chief Justice Warren E. Burger, (Ret.) U.S. Supreme Court.
Resolving disputes peacefully through discussion – mediation -- is itself is an old idea. Forseti, the Scandinavian god of justice, was considered the wisest and most eloquent of gods in pre-Christian times in part because he resolved disputes by mediation. Among Native American tribes, the most respected person was the one who mediated disputes. "A person who can take the ordinary and illuminate it, invoking deep feelings in others often is called a creative genius. The Ancestors call those who carry that talent The Gifted Ones." (Jamie Sams, Earth Medicine, 197 (Harper San Francisco, 1994).)
Let us take a big step forward for humanity and celebrate mediation as the first and best choice for dispute resolution. During Mediation Week we will present many opportunities to learn about mediation and why it should be the first choice, not the alternative. This year the ADR (Alternative Dispute Resolution) section of ACBA will present an MCLE program followed by a reception in honor of Mediation Week. The program, “Mediating with Self-Represented Litigants,” satisfies one of the mandatory CLE requirements for mediators to participate in the new Alameda County Superior Court panel. Please see our web page for more details - http://www.acbanet.org/index.cfm?fuseaction=Content.ContentDetail&id=9172.
In past Mediation Week festivities many courts and schools held events and presented programs on mediation – including training students in peer mediation. Last year a program at California State University Stanislaus trained students and held mock mediations. Clips of the Mock Mediation conducted with students at were shown during the television program Hablando Con Nuestra Gente ("Talking with our People") on Azteca TV, a local Spanish station.
For more information on what is happening in your area for Mediation Week go to: http://www.courtinfo.ca.gov/programs/adr/events.htm and for local workshops go to: http://www.seedscrc.org. During Mediation Week SEEDS (Services that Encourage Effective Dialogue and Solutions) will offer several workshops in conflict resolution skills and make available books and materials for loan.
On February 18, President Obama introduced the "Homeowner Affordability and Stability Plan," with the stated goal of helping to bring relief to homeowners and bring some order to the housing market.
The objective of the plan is to help millions of homeowners refinance into safer, more affordable fixed rate loans. Refinancing should save the borrower money by reducing the amount of interest paid over the life of the loan. The plan will work principally by providing incentives to lenders to renegotiate the terms of mortgages, usually resulting in lowered interest rates. There are some restrictions: The program is limited to loans held or securitized by Fannie Mae or Freddie Mac; it will only address first mortgages; and you must live in the home.
More details on the eligibility and the plan itself will become available on March 4th, when it goes into effect. Here are answers to some questions you may have about the plan and who is eligible:
I am current on my mortgage payments but the value of my home has decreased. Can this plan help me?
Borrowers who are current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.
I owe more than my house is worth. Will the plan reduce what I owe?
Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.
My home has decreased in value, am I eligible?
One objective of the plan is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Lenders are likely to lower payments mainly by reducing loan interest rates. However, the program offers incentives for principal reductions and at your lender’s discretion modifications may include upfront reductions of loan principal.
Do I have to be behind on my mortgage payments to be eligible for a modification?
No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This could be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.
What if I don’t live in the house with the mortgage I want to modify?
The plan only covers the mortgage on your primary residence, where you live. The mortgage lender will check to see if the dwelling is your primary residence. However, if you live in one unit and rent out other units –such as a duplex-- you may be eligible.
How do I know if I qualify for a payment reduction under the plan?
In general, you may qualify for a mortgage modification if (a) you occupy your house as your primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.
Who is eligible for this plan?
While complete eligibility details will be announced on March 4th when the program starts, the criteria will include having sufficient income to make the new payment and an acceptable mortgage payment history. The program is limited to loans held or securitized by Fannie Mae or Freddie Mac. To find out if your loan is owned or has been securitized by Fannie Mae or Freddie Mac and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.
Is my lender required to modify my loan?
No. Mortgage lenders participate in the program on a voluntary basis and loans are evaluated for modification on a case-by-case basis. But the government is offering substantial incentives and it is expected that most major lenders will participate.
My loan is scheduled for foreclosure soon. What should I do?
Contact your mortgage servicer or credit counselor. Many mortgage lenders have expressed their intention to postpone foreclosure sales on all mortgages that may qualify for the modification in order to allow sufficient time to evaluate the borrower's eligibility.
If you are facing foreclosure or are having other financial problems, beware of scammers. I recommend you see a reputable credit counselor, most likely a non-profit organization. Many of these organizations offer free or low-cost counseling:
Money Management International: 1-866-889- 9347
Consumer Credit Counseling of San Francisco: 1-800-777-7526
When can I apply?
Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.
For more details, see the White House website on the plan:
EVELYN J. HERRERA Esq. MEDIATOR
Oakland, CA 94612
ph: (510) 893-3711