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While critics have said that foreclosure mediation mandates will only serve to slow down the process and create considerable issues for borrowers and financial institutions, a recent study found this is not the case.

Currently, there are 19 states that mandate homeowners go through a mediation program before their property can be foreclosed upon, and data collected from those programs suggest that not only do they not prolong the process, but they also save money, according to a report from the National Consumer Law Center. In particular, the fees associated with these mediation programs average between $0 and $1,000, and are either paid by the homeowner or lender or, in some cases, both. Meanwhile, in states where there is no mediation process, the costs can be significantly higher.

In addition, the mediation process does not prolong the process of property seizure because the programs have to work within state-mandated timeframes, the report said. For example, in Pennsylvania, the average case takes about 53 days to complete, while other states can see it take as long as 10 months.

“Evidence shows that effective foreclosure mediation can keep paying borrowers in their homes for the long term while also saving billions of dollars for taxpayers and investors,” said Geoff Walsh, an attorney at the NCLC, and author of the report. “The evidence is in that mediation programs can be financially self-sustaining, do not prolong inevitable foreclosures, and are a proven tool that can help rebuild the fragile U.S. economy. If all states adopted strong foreclosure mediation programs, it would prevent further harm to millions of families while also saving local communities and investors billions of dollars.”

These programs can also be of benefit to borrowers because they often lead to their being connected with a housing counselor, which can give them better access to affordable and sustainable home loan modification programs which allow them to keep their homes, the report said. Further, these programs can be viewed as doing a considerable amount of good as far as repairing the struggling housing market, because they help to mitigate the rate of defaulted payments.

Many attempts have been made to artificially boost the housing market, including a number of government programs designed to help financially distressed consumers alter the terms of their mortgage agreements.

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