What is mediation?
Mediation is an informal and confidential way for people to resolve disputes with the help of a neutral mediator who is trained to help people discuss their differences. The mediator does not decide who is right or wrong or issue a decision. Instead, the mediator helps the parties work out their own solutions to problems.
One of the greatest benefits of mediation is that it allows people to resolve the dispute in a friendly way and in ways that meet their own unique needs. Also, a charge can be resolved faster through mediation. While it takes less than 3 months on average to resolve a charge through mediation, it can take 6 months or longer for a charge to be investigated. Mediation is fair, efficient and can help the parties avoid a lengthy investigation and litigation.
What is mandatory mediation?
Law No. 184, known as the Principal Residence Protection and Mandatory Mediation in Foreclosure Proceedings Act, was enacted in August 17, 2012.
The Mandatory Mediation Program is designed to help parties involved in mortgage foreclosure matters settle their cases early in the litigation process to save time and money.
A mandatory mediation meeting chaired by a selected mediator will be held in cases where a mortgagee may have initiated a foreclosure process, or those which may culminate in the judicial sale of a property that is being used as a principal residence by a mortgagor.
At this meeting, the mortgagee will share with the mortgagor all of the options that are available in the market to avoid foreclosure or the judicial sale of a residential property that is being used as a principal residence.
The goal is to try to reach an agreement or modification that will enable the mortgagor to set up a repayment plan or any other satisfactory alternative that will help them avoid the loss of their main residence.
The compulsory nature the initial mediation session does not imply that the parties are required to reach an agreement as a result.
Where does the mediation take place?
It is conducted in a courtroom or at any other location agreed to by all parties (including the mediator); however, it cannot take place at the mortgagee’s headquarters or at their lawyers’ office.
The mediation process can take place at the Conflict Mediation Centers located in each judicial region, where services will be provided for free.
It can also be carried out at another location agreed to between the parties, except at the premises of the mortgage bank or their legal counsel, with the intervention of a duly registered mediator appointed by the Bureau of Alternate Methods for Conflict Resolution.
Who is covered by mediation?
The mandatory mediation only covers people who are facing a mortgage foreclosure or the judicial sale of their principal residence, who have answered a court summons or a judgment, and who are not in contempt of court.
Do I need a lawyer to participate in the mediation program?
No, you do not have to be represented by a lawyer to participate in this program.
What if the debtor does not attend the mediation?
If the debtor does not show up to the mediation hearing, or fails to comply with the agreement reached through the mediation process, the financial institution will proceed as specified in the contract or promissory note executed when the original mortgage loan was closed.
How many mediations am I entitled to?
Debtors are entitled to only one mediation process upon facing a civil lawsuit for the foreclosure on the property that is being used as their principal residence, provided that they are not in contempt of court, or that their pleas have been suppressed or eliminated by the court.
Are there any fees attached to the mediation application?
Yes, there are some fees that will be equally shared by both parties - unless otherwise specified.
Is the mediation a confindential process?
Yes, any discussions exchanged during the mediation session are completely confidential.