Foreclosure Mediation Campaign

The epidemic of foreclosures continues.  Families, neighborhoods and cities have been left reeling from the negative consequences of the housing crisis.  Vacant and untended houses and businesses dot the landscape of once vibrant neighborhoods.  Property values and local tax revenue are greatly reduced.  Families are being thrust into a future of great emotional and financial instability.

Our faith values tell us that we must restore health and stability to our neighborhoods and the families suffering under our dysfunctional financial system.

One proven way to reduce the number of foreclosures is through foreclosure mediation.  Around the country, more than 70 percent of mediated cases reach a settlement – usually ensuring that a family stays in their home.  Foreclosure mediation could make a difference for many Minnesotan families.

ISAIAH began the Foreclosure Mediation Campaign through its work on affordable housing when leaders found that areas of our cities were devastated by the foreclosure crisis and members of our congregations were unable to negotiate with their mortgage holders.

The Foreclosure Mediation Campaign has now grown to be much larger than ISAIAH.  Organizations and leaders from across the state have joined this campaign to pass foreclosure mediation ordinances in the Twin Cities, giving homeowners more options when facing potential foreclosure.  You can check out the campaign’s website and see a list of organizational supporters by clicking here.

Foreclosure Mediation:  A Win-Win Solution

Foreclosure mediation benefits all of the involved parties.

  • Lenders and servicers avoid a long and costly foreclosure process.
  • Most homeowners in mediated cases get to keep their homes. Those for whom paying a mortgage is not a sustainable option benefit by negotiating a “graceful exit” in how and when they move out.
  • Neighbors and taxpayers benefit by reducing the number of vacant homes and stabilizing property values and tax revenue.
  • Foreclosure prevention counselors gain an extra tool to work with lenders.


Foreclosure mediation programs prevent unnecessary foreclosures by bringing lenders and homeowners together for a face-to-face conversation about the homeowner’s situation and available options.

State and Local Mediation Programs

Local or statewide foreclosure mediation programs exist in 24 states. State governments can require lenders to engage in mortgage mediation. Local municipalities are not able to mandate mediation the way a state law could. In Minnesota, cities could provide an incentive for lenders to participate in mediation programs by charging a penalty when lenders register a vacant house they obtained through foreclosure without engaging in good-faith mediation.

How a Local Foreclosure Mediation Program Could Work 

  1. A Mediation Coordinator would be appointed by the city. The Coordinator could be housed in a department of the City, or by a nonprofit partner entity.
  2. The program would be funded through fees paid by lenders participating in the program.
  3. Lenders would include a notice of the homeowner’s right to participate in a mediation conference along with any notice of intent to foreclose.
  4. The mediation program would work to reach an agreement between the lender and the homeowner. When the two sides are unable to reach an agreement, the mediation program issues a report that includes whether the lender made a good faith effort.
  5. At the time the property owner registers a vacant building with the city, the property owner would pay a penalty if the property had become vacant due to a foreclosure without a good faith effort at mediation.