By Alan White
Besides having a world-class orchestra and baseball team, and stunning Art Deco hotel for this week's National Consumer Law Center conference, Philadelphia boasts a wonderful legal community that continues its extraordinary collaborative effort to tackle the foreclosure crisis. This afternoon I stopped by now-famous room 676 City Hall weekly foreclosure court. Out of about 80 new judicial foreclosure filings scheduled for mediation conferences where the defendant was served, about 60 defendants actually showed up and began the process of negotiating a resolution. A 75% response rate from foreclosure defendants is amazing, as any counseling agency, hotline or mortgage servicer will attest. The key to Philadelphia's success is a combination of aggressive outreach and mandatory, automatic scheduling of conferences in every new foreclosure case. Whenever a new foreclosure is filed for an owner-occupied home, the plaintiff serves the homeowner with a court-generated case management Order scheduling a date, time and place for the mandatory conciliation conference.
A quick look at mortgage investor reports reveals that Philadelphia is well ahead of the nation in foreclosure prevention. In the month of September 2008, about 4% of Philadelphia mortgages in foreclosure were liquidated and sold by servicers, compared with a 12% foreclosure liquidation rate for the month nationwide. Meanwhile modifications that month amounted to nearly 10% of Philly mortgages in foreclosure, compared with 7% nationwide.
The success of the Philadelphia program is not due merely to good intentions. The City government, bar association, legal services programs, housing counselors and court system have joined together to do the necessary outreach, staffing of weekly mediation conferences, follow-up and the tedious work of getting mortgage servicers to yes. The system is not free; good mediation and foreclosure prevention costs money, for counselors, lawyers, mediators, and court time. It also requires a community commitment to results, shared by lawyers for servicers and borrowers and the judicial system. Makes me proud to be a Philadelphia lawyer.
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