The mediator issues a certificate to both borrower at the end of the foreclosure mediation process, indicating whether each party acted in good faith or bad faith. If a party did what was required of them to move the mediation process forward, they will receive a good faith certificate. However, if they did things that hinder the mediation process, such as turn in documents late or lie, they will receive a bad faith certificate.
If your bank has been issued a bad faith certificate in foreclosure mediation, then theoretically you have persuasive grounds to sue them. However, most struggling homeowners don’t have the funds to pay a litigation attorney and - even if they do - the banks always have more funds. Therefore we don’t usually recommend that borrowers try to sue their lenders.
There is not a lot of recourse for a homeowner whose lender has been issued a bad faith certificate in foreclosure mediation. Unfortunately, the Washington State Foreclosure Fairness Act provides no consequences such as fines or penalties. Theoretically, a borrower can sue a lender who has received a bad faith certificate, but this is not always practical for a borrower to do.
Having your bank sell your loan to another servicer during foreclosure can actually turn into an advantage. It may help make the mediator side with you. If you are wanting to move more slowly with things or extend your time in your home, it will slow down the foreclosure mediation timeline. In some cases, the new servicer has different, more lenient guidelines than the original servicer.
Although you are permitted to have both a housing counselor and an attorney at your foreclosure mediation, there is no reason to use both. You just need one qualified person who is aligned with your interests to represent you. Having two advocates can jeopardize your mediation, because there is no single person who knows everything that is going on.
The borrower is permitted to attend the foreclosure mediation session by conference call. We recommend that you either make sure that the other parties agree to that in advance, or that you sign a Power of Attorney to protect yourself and your advocate, just in case any of the other parties objects to you attending by telephone.
Yes, it is possible that your loan servicer (your bank or your lender) sells your mortgage loan. If your loan is sold while you are in foreclosure mediation, the good news is that it does not affect the mediation. It may delay the mediation process, but that can also work to your advantage because it makes it look like you are the party who is doing everything right while the lender is not.
First, assess why it is that you want to file a complaint about your housing counselor. Housing counselors do not have the training and experience of foreclosure attorneys. It is possible that the housing counselor has not done anything wrong, but that they have just hit the limits of their training, and you should look into getting an attorney. If you do feel they have done something wrong, you can file a complaint about your housing counselor online.
There is not much that you need to bring with you to your foreclosure mediation session, other than to make sure you show up with any payments that may be due, such as rescheduling fees. Your advocate (housing counselor or attorney) is the one tasked with bringing everything - not you.
You will know if your attorney is prepared for foreclosure mediation if they can answer these three questions:
There are several things to look at when deciding whether to use an attorney or a housing counselor as your mediation representative. Housing counselors are provided for free by the Washington State government. However, foreclosure attorneys are more highly trained and better informed about lender guidelines, and may do a better job in achieving the resolution you want.
Follow these steps to file a complaint against your foreclosure mediator: