MEMPHIS, TN – Shelby County homeowners facing foreclosure might get a little relief. Mediators may help them negotiate with banks. That's the idea behind a bill pending in the Tennessee legislature.
"A professionally trained mediator would mediate between the lending institution and the homeowner and try to work out an agreement between the two," explained Shelby County Commissioner Mike Carpenter.
Mediation would be voluntary, but the head of the Memphis Mortgage Bankers Association said homeowners need every option.
"There are a lot of people trying to keep their homes, a lot of people upside down on their loans or getting behind on their payments,” Sam Goff said.
He said mediation lets homeowners save homes, and banks save money.
"The public should really understand lenders do not want your home because it's not in their best interest to foreclose,” Goff said.
Carpenter said foreclosure hits families and communities hard, so it's in everyone's best interest to avoid it.
“While there’s a lot of debate about what role the government should play in this issue of lending and foreclosure, I think it’s in everyone’s best interest at this point to mediate when we can between the homeowner and the lender,” Carpenter said, “So that everybody at least walks away with something.
“Our economy is impacted by these foreclosures,” he continued. "We all lose if we don't find a solution to the foreclosure problem.”
This proposal would create a pilot program for Shelby County, but the bill still needs approval from state legislators. Even though the proposal makes mediation voluntary, lenders who take that route would get a break. They would not face penalties for any violations of the state law that protects homeowners from predatory lenders.
