Mortgage Foreclosure: Allegheny County Common Pleas Court Will Announce the Inception of its Much-Awaited Owner-occupied Residential Mortgage Foreclosure Mediation Program Soon.

Posted By Cliff Tuttle | November 24, 2008

Posted by Cliff Tuttle

The Allegheny County Common Pleas Court is working out the last technical details for implementation of a much anticipated mortgage foreclosure conciliation program. After a meeting this week with Allegheny County officials, President Judge Joseph James expects to sign the order of court launching the program on Friday.

The Department of Court Records is establishing procedures to create a separate series of docket numbers for owner-occupied residential mortgage foreclosure cases. These cases will then be monitored separately from other Civil Division cases.

The segregation and monitoring of owner-occupied residential mortgage foreclosures is likely to begin in January. When the Sheriff serves the complaint in a new case, the defendant will also receive a special notice on colored paper containing a telephone number to enroll in the mediation program. Cases involved in such mediation would then be stayed for 90 days to enable the parties to negotiate a settlement. Established consumer credit counseling organizations such as Action Housing will provide assistance, as they have for many years with consumer applications to the Pennsylvania Housing Finance Agency under Act 91. Also, free legal assistance will be provided through the Allegheny County Bar Association Pro Bono Committee. It is hoped that, with legal and credit counseling assistance, borrowers who are financially able to make partial payments can propose a short-term plan that would enable them to stay in their homes while making payment of an amount sufficient to enable the account to be brought current in the forseeable future. Of course, the long term goal would be the eventual repayment of the loan in full.

These cases will be conciliated by Common Pleas Court Judge Michael McCarthy. However, only newly-filed cases will be eligible for the program. The developers of the program decided that it would be too difficult to include older cases that were awaiting sheriff’s sale. Moreover, older cases were burdened with filing fees, attorneys and sheriff’s costs that made settlement more difficult.

Once the Notice of Intent to Foreclose (Act 91 Notice) has been sent, most lenders will not accept payment of an amount less than the total needed to bring the case current. However, as the volume of foreclosures has continued to break all records, many lenders have admitted that the resale prices brought by foreclosed properties in an overloaded real estate market do not justify continuing the high volume of forclosure activity. This situation has recently resulted in suspensions of foreclosures by Fannie Mae and Freddie Mac (click here for details) and by several of the largest national mortgage lenders. A growing number of states, such as California, New Jersey, Connecticut and Colorado are also discussing plans for moratoria on new foreclosures, to be followed by various types of mediation programs.

Pittsburgh Legal Back Talk has followed local trends in this area since we came on line in early summer. We will continue to report developments in this vital program regularly.

CLT

Welcome

CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

Subscribe to our feed