I was really touched by the human spirit depicted in this article. It is a reminder that despite all of our faults as humans, we can rise above and demonstrate extraordinary compassion and love for one another. In my mediation endeavors, I am always attempting to find that part of the human spirit that rises above the noise of the conflict and resonates with the notions implicit in this article.
By NELL BURGER KIRST
Published: March 30, 2009
I never really got to know the young woman. I met her during my third-year psychiatry rotation, when our team was consulted for concerns about depression.
Privacy rules won’t allow me to use her name (where possible, I’ve gotten consent from the others involved in this story). She was terminally ill, sick not just with the disease but with all the complications of its treatment, and confined to bed in the intensive care unit.
By the time I met her she could barely speak. Her face was a vacant yellow moon, and her sparse, colorless hair sprawled tangled and sweat-soaked across her pillow.
What I did come to know of her was through her boyfriend, Josh. They had been together since middle school and had stayed together even as the rest of her life fell apart.
When her strained relationship with her parents became impossible and they were no longer in her life, Josh remained her confidant and closest friend. When she learned she was seriously ill, she and Josh filled out the paperwork required to give him her durable power of attorney.
So it was that he sat by her bed day after day, occasionally rising from his post there to perform the rudimentary maintenance that she no longer could: wiping the tears from her eyes and clearing the caked secretions around her mouth.
In her medical chart, he is referred to not as her “boyfriend,” but as “family” or even simply as “Josh,” and his presence in her record traces much of the agonizing march of her illness.
As she takes a turn for the worse: “Josh feels that [the patient] is still fighting and would like to proceed with treatment.”
As organ systems begin failing: “Family will readdress code status tomorrow.”
And finally, as supportive medical care is withdrawn: “Josh understands that [she] is dying and states that he is struggling to imagine a future without her.”
•
Five months later, in the dead of winter, a 25-year-old man named David was changing a flat tire on the side of the road when he was struck by a van. He landed in the I.C.U. on a ventilator, with multiple fractures. I had landed there just several days earlier in my capacity as a medical student, and I would follow him as my patient for the next several weeks.
He soon became medically stable enough to move to a general hospital floor, but he had significant behavioral problems that required a sitter to stay with him around the clock. He routinely removed his feeding tube, refused to work with therapists, would not use a bedpan. He was frustrating and difficult to work with, and he was sabotaging his own recovery.
One morning I spoke with his nurse about his progress. His feeding tube had been in place for 30 hours straight. He had begun to cooperate in physical therapy, and he was using the bedpan without complaints.
David’s mother emerged into the hallway to confirm his improvement. It seemed to her to have a lot to do with the sitter who had been assigned to him for the past couple of days.
The sitter, she said, was extremely patient. He was supportive and enthusiastic, listening to David’s stories and sharing stories of his own. He was someone David could relate to, a perfect fit for him. I nodded, encouraged, and walked into the room.
There was David, sitting up in his hospital bed, animated and joking with his sitter. The thick, tedious air that had occupied David’s room effervesced and became light, and it happened so quickly I could not catch my breath.
His sitter was Josh.
It turned out he had taken a job with the hospital after his girlfriend’s death. His story, I realized, was a kind of love story, and in some way it evoked all of our stories, whether we are doctor or patient, comforter or comforted, healer or healed. Josh reaffirmed for me what we medical professionals know but all too easily forget: the human story is not a series of illnesses and treatments that we manage, but is an unfolding mystery — a process with which we ourselves are in ongoing communion, as both witnesses and full as participants.
There, settling into our place in the story, we can see it in its wholeness and let it make us whole. We take part in its healing as it unfolds, and we are healed by its unfolding.
Nell Burger Kirst is a fourth-year medical student.
Tuesday, March 31, 2009
Tuesday, March 10, 2009
The Mediation Industry: Our Time Has Come
Great article from James Melamed, one of the founders of Mediate.com
The Mediation Industry: Our Time Has Come
--------------------------------------------------------------------------------
by James Melamed
February 2009
Could the use of mediation be increasing during our difficult times? The answer by my direct day-to-day experience is absolutely “yes.” Mediation has proven itself to be "better, faster and cheaper" and those marketplace qualities have come to matter more than ever.
As a bit of background, it is worth noting that, as the mediation field got seriously going in the late 70’s and early 80’s, there was some sense that mediation might be a unified field. This was based on the (perhaps accurate) assessment that a capable mediator can mediate agreement in a wide variety of areas. True or not, this is not how the “mediation industry” has evolved or is evolving. Rather, for many practical reasons, there has been and is a current “balkanization” of the mediation field into dozens of practice areas, each with its own culture, organizations, qualifications, standards, market, etc.
In fact, the mosaic of mediation that has evolved and is evolving is so broad and differentiated in its so many applications that “mediation” as a whole simply can not be managed as any single thing. Mediation is as much social movement as professional development, as much a shift in culture as a dispute resolution option. Mediation has rapidly become, with precious little fanfare, the ocean we swim in and the air we breathe. It would now be hard to imagine a world where it wasn't.
Our growth is not based upon people wanting to engage conflict. People hate conflict. Our growth is based upon mediation, despite its flaws, being widely and consistently viewed as the best alternative process available. If people can not resolve things themselves, it simply makes sense to have a capable helper step in to assist rather than subsidizing a small war. Critical in all this is the continuing recognition of the essential voluntary, confidential and decision-making control qualities of mediation that are expected in all contexts. This is what binds us: our joint commitment to voluntary, safe and capable participant controlled decision-making.
I am rather stunned by mediation’s flexibility and adaptability. One of the reasons for this is that mediation is “scalable.” For example, we can provide 20 or 2 hours of mediation or offer some portion of it online, whereas you just don’t have that kind of flexibility with administrative and court due process hearings. Mediation’s flexibility, organically based on emerging opportunities and our ever-hungry readiness, is leading to mediation becoming the expected way we resolve disputes. Today, what raises eyebrows isn't the provision of mediation, it is when mediation isn't offered as an option.
Take, for example, the current foreclosure crisis. What is the governmental response? In one form or another, it is to stimulate the renegotiation of at-risk mortgages. And what is the vehicle for all of this? Is it the courts? Is it due process hearings? No, in state after state, and soon for the federal government as well, there has been a systemic reliance on mediation to get the job done. See the ongoing headlines at www.mediate.com/Today to get a sense of what I am talking about.
Mediation has also been relied upon for the processing of claims for mass disasters like hurricanes Katrina and Rita and is now standard fare in crisis planning. Why? Because mediation resolves 70-80% of situations, does this efficiently and voluntarily, more affordably and faster, and more durably than any traditional due process alternative. Publicly sanctioned mediation is the way one gets the other side to sit down to the table (and increasingly, we will see that this “table” may be our own computer desk!)
Increasingly, we will also see mediation applications, such as foreclosures and hurricane claims, will come to include “good faith” negotiating requirements, if only for financial, insurance, governmental or other institutions. As government comes to rely on mediation more and more to get overwhelming jobs done, we will need to think how we can play our valuable role without becoming a witness on the issue of good faith participation.
What is happening, especially under the current economic stress conditions, is that things are “shaking out” and our economy and society simply can not afford to process disputes in the old (inefficient) due process ways. Sure, we need due process protections in the background, but what sane person is going to refuse a capable, early opportunity to put things right, especially if they can do safely, affordably and conveniently, if not at their computer in their pajamas.
I could go on and on about the growth indicators I see, including traffic to Mediate.com (see www.mediate.como/visits) which tell me that, rather then the mediation industry suffering during these times, I am convinced THIS IS OUR TIME. (“our” being the Balkanized States of Mediation).
One point worth noting, with the Obama administration’s commitment to diplomacy and collaboration (I know some will disagree), there is a meaningfully different social, governmental and cultural context for mediation now. For me, it is the difference between night and day. I don’t want to belabor this point knowing that I offend some who disagree, but, strategically, for the mediation industry, the change in governmental context is huge.
Other “meta” changes are taking place in the way we resolve disputes. Sure there is often a good measure of face to face discussion, but not always. We are increasingly seeing the use of the internet for purpose of filing, discovery, motions, online discussion, web resource centers, ratings of mediators, certification . . . The internet offers our industry, and each of us the opportunity to assist people to be better informed, to be better in making conflict resolution choices and to more easily access mediation services.
There is, for example, a current pilot program to resolve divorce issues online in the Netherlands. AAA recently announced its “under $10,000 dispute” online dispute resolution program. E bay resolves virtually all of its disputes online. With the rise in gas prices, I am getting calls from places like North Dakota and British Columbia about online dispute resolution for programs that simply can not afford to drive to provide services. So, as our communication capacities steadily improve and costs of getting together ever elevate, it is certain that there will be increased use of the internet in dispute resolution.
The gateway for dispute resolution is already far more "Google" than "the courts". You can quote me on that!
And with our economic pressures, at the micro practice level, we are also seeing mediators and mediation programs “wake up” and realize that they will not survive our current economic plight with “business as usual.” And so, as practitioners and organizations are now wisely retooling to better focus and, bless the lord, to elevate their web presence and internet capacities.
I daily operate at the intersection of all things mediation and all things internet. I have “my finger” (really mouse pointer) on a number of daily pulses – be that web site traffic, sales, directory utilization, phone calls, emailed articles, printed articles, comments, etc. So, what I am saying is that I really do not think it is going to be doom and gloom for the mediation industry over the next couple of years. In fact, I see the exact opposite. I am convinced that the economic pressures of these times mean that mediation’s “time has come.” Yes, we are now perhaps the Balkanized States of Mediation, but ever-expanding opportunities are waiting on every front of mediation development.
The potential for refined application of valuable mediation processes over the next years is massive. We help people get problems resolved and we are wise to be ever-ready to do that faster, better and cheaper. The word is out. A silent revolution has taken place. Policy makers don’t even think twice now in favoring, in relying upon mediation. Our culture has changed. We have changed. Our time has come.
The Mediation Industry: Our Time Has Come
--------------------------------------------------------------------------------
by James Melamed
February 2009
Could the use of mediation be increasing during our difficult times? The answer by my direct day-to-day experience is absolutely “yes.” Mediation has proven itself to be "better, faster and cheaper" and those marketplace qualities have come to matter more than ever.
As a bit of background, it is worth noting that, as the mediation field got seriously going in the late 70’s and early 80’s, there was some sense that mediation might be a unified field. This was based on the (perhaps accurate) assessment that a capable mediator can mediate agreement in a wide variety of areas. True or not, this is not how the “mediation industry” has evolved or is evolving. Rather, for many practical reasons, there has been and is a current “balkanization” of the mediation field into dozens of practice areas, each with its own culture, organizations, qualifications, standards, market, etc.
In fact, the mosaic of mediation that has evolved and is evolving is so broad and differentiated in its so many applications that “mediation” as a whole simply can not be managed as any single thing. Mediation is as much social movement as professional development, as much a shift in culture as a dispute resolution option. Mediation has rapidly become, with precious little fanfare, the ocean we swim in and the air we breathe. It would now be hard to imagine a world where it wasn't.
Our growth is not based upon people wanting to engage conflict. People hate conflict. Our growth is based upon mediation, despite its flaws, being widely and consistently viewed as the best alternative process available. If people can not resolve things themselves, it simply makes sense to have a capable helper step in to assist rather than subsidizing a small war. Critical in all this is the continuing recognition of the essential voluntary, confidential and decision-making control qualities of mediation that are expected in all contexts. This is what binds us: our joint commitment to voluntary, safe and capable participant controlled decision-making.
I am rather stunned by mediation’s flexibility and adaptability. One of the reasons for this is that mediation is “scalable.” For example, we can provide 20 or 2 hours of mediation or offer some portion of it online, whereas you just don’t have that kind of flexibility with administrative and court due process hearings. Mediation’s flexibility, organically based on emerging opportunities and our ever-hungry readiness, is leading to mediation becoming the expected way we resolve disputes. Today, what raises eyebrows isn't the provision of mediation, it is when mediation isn't offered as an option.
Take, for example, the current foreclosure crisis. What is the governmental response? In one form or another, it is to stimulate the renegotiation of at-risk mortgages. And what is the vehicle for all of this? Is it the courts? Is it due process hearings? No, in state after state, and soon for the federal government as well, there has been a systemic reliance on mediation to get the job done. See the ongoing headlines at www.mediate.com/Today to get a sense of what I am talking about.
Mediation has also been relied upon for the processing of claims for mass disasters like hurricanes Katrina and Rita and is now standard fare in crisis planning. Why? Because mediation resolves 70-80% of situations, does this efficiently and voluntarily, more affordably and faster, and more durably than any traditional due process alternative. Publicly sanctioned mediation is the way one gets the other side to sit down to the table (and increasingly, we will see that this “table” may be our own computer desk!)
Increasingly, we will also see mediation applications, such as foreclosures and hurricane claims, will come to include “good faith” negotiating requirements, if only for financial, insurance, governmental or other institutions. As government comes to rely on mediation more and more to get overwhelming jobs done, we will need to think how we can play our valuable role without becoming a witness on the issue of good faith participation.
What is happening, especially under the current economic stress conditions, is that things are “shaking out” and our economy and society simply can not afford to process disputes in the old (inefficient) due process ways. Sure, we need due process protections in the background, but what sane person is going to refuse a capable, early opportunity to put things right, especially if they can do safely, affordably and conveniently, if not at their computer in their pajamas.
I could go on and on about the growth indicators I see, including traffic to Mediate.com (see www.mediate.como/visits) which tell me that, rather then the mediation industry suffering during these times, I am convinced THIS IS OUR TIME. (“our” being the Balkanized States of Mediation).
One point worth noting, with the Obama administration’s commitment to diplomacy and collaboration (I know some will disagree), there is a meaningfully different social, governmental and cultural context for mediation now. For me, it is the difference between night and day. I don’t want to belabor this point knowing that I offend some who disagree, but, strategically, for the mediation industry, the change in governmental context is huge.
Other “meta” changes are taking place in the way we resolve disputes. Sure there is often a good measure of face to face discussion, but not always. We are increasingly seeing the use of the internet for purpose of filing, discovery, motions, online discussion, web resource centers, ratings of mediators, certification . . . The internet offers our industry, and each of us the opportunity to assist people to be better informed, to be better in making conflict resolution choices and to more easily access mediation services.
There is, for example, a current pilot program to resolve divorce issues online in the Netherlands. AAA recently announced its “under $10,000 dispute” online dispute resolution program. E bay resolves virtually all of its disputes online. With the rise in gas prices, I am getting calls from places like North Dakota and British Columbia about online dispute resolution for programs that simply can not afford to drive to provide services. So, as our communication capacities steadily improve and costs of getting together ever elevate, it is certain that there will be increased use of the internet in dispute resolution.
The gateway for dispute resolution is already far more "Google" than "the courts". You can quote me on that!
And with our economic pressures, at the micro practice level, we are also seeing mediators and mediation programs “wake up” and realize that they will not survive our current economic plight with “business as usual.” And so, as practitioners and organizations are now wisely retooling to better focus and, bless the lord, to elevate their web presence and internet capacities.
I daily operate at the intersection of all things mediation and all things internet. I have “my finger” (really mouse pointer) on a number of daily pulses – be that web site traffic, sales, directory utilization, phone calls, emailed articles, printed articles, comments, etc. So, what I am saying is that I really do not think it is going to be doom and gloom for the mediation industry over the next couple of years. In fact, I see the exact opposite. I am convinced that the economic pressures of these times mean that mediation’s “time has come.” Yes, we are now perhaps the Balkanized States of Mediation, but ever-expanding opportunities are waiting on every front of mediation development.
The potential for refined application of valuable mediation processes over the next years is massive. We help people get problems resolved and we are wise to be ever-ready to do that faster, better and cheaper. The word is out. A silent revolution has taken place. Policy makers don’t even think twice now in favoring, in relying upon mediation. Our culture has changed. We have changed. Our time has come.
Saturday, March 7, 2009
Too heavy!!! Let's have some fun
My friend Renee forwarded this on to me. Great way to start the day.
Here is the Washington Post's Mensa invitational - which once again asked readers to take any word from the dictionary, alter it by adding, subtracting, or changing one letter, and supply a new definition. Here are the winners:
1. Cashtration (n.): The act of buying a house, which renders the subject
financially impotent for an indefinite period of time.
2. Ignoranus (n.): A person who's both stupid and an asshole.
3. Intaxication (n.): Euphoria at getting a tax refund, which lasts until you
realize it was your money to start with.
4. Reintarnation (n.): Coming back to life as a hillbilly.
5. Bozone (n.): The substance surrounding stupid people that stops bright ideas from penetrating. The bozone layer, unfortunately, shows little sign of breaking down in the near future.
6. Foreploy (n.): Any misrepresentation about yourself for the purpose of getting laid.
7. Giraffiti (n.): Vandalism spray-painted very,very high.
8. Sarchasm (n.): The gulf between the author of sarcastic wit and the Person who doesn't get it.
9. Inoculatte (v.): To take coffee intravenously when you are running late.
10. Osteopornosis (n.): A degenerate disease. (This one got extra credit.)
11. Karmageddon (n.): It's like, when everybody is sending off all these really bad vibes, right? And then, like, the Earth explodes and it's like, a serious bummer.
12. Decafalon (n.): The gruelling event of getting through the day consuming
only things that are good for you.
13. Glibido (n.): All talk and no action.
14. Dopeler effect (n.): The tendency of stupid ideas to seem smarter when they
come at you rapidly.
15. Arachnoleptic fit (n.): The frantic dance performed just after you've accidentally walked through a spider web.
16. Beelzebug (n.): Satan in the form of a mosquito, that gets into your bedroom at two or three in the morning and cannot be cast out.
17. Caterpallor (n.): The color you turn after finding half a worm in the fruit you're eating.
The Washington Post has also published the winning submissions to its yearly contest, in which readers are asked to supply alternate meanings for common words. And the winners are:
1. Coffee, n. The person upon whom one coughs.
2. Flabbergasted, adj. Appalled by discovering how much weight one has
gained.
3. Abdicate, v. To give up all hope of ever having a flat stomach.
4. Esplanade, v. To attempt an explanation while drunk.
5. Willy-nilly, adj. Impotent.
6. Negligent, adj. Absentmindedly answering the door when wearing only a nightgown.
7. Lymph, v. To walk with a lisp.
8. Gargoyle, n. Olive-flavored mouthwash.
9. Flatulence, n. Emergency vehicle that picks up someone who has been run over by a steamroller.
10. Balderdash, n. A rapidly receding hairline.
11. Testicle, n. A humorous question on an exam.
12. Rectitude, n. The formal, dignified bearing adopted by proctologists.
13. Pokemon, n. A Rastafarian proctologist.
14. Oyster, n. A person who sprinkles his conversation with yiddishisms..
15. Frisbeetarianism, n. The belief that, after death, the soul flies up
onto the roof and gets stuck there.
16. Circumvent, n. An opening in the front of boxer shorts worn by Jewish men.
---------------------------------------------------------------------
Here is the Washington Post's Mensa invitational - which once again asked readers to take any word from the dictionary, alter it by adding, subtracting, or changing one letter, and supply a new definition. Here are the winners:
1. Cashtration (n.): The act of buying a house, which renders the subject
financially impotent for an indefinite period of time.
2. Ignoranus (n.): A person who's both stupid and an asshole.
3. Intaxication (n.): Euphoria at getting a tax refund, which lasts until you
realize it was your money to start with.
4. Reintarnation (n.): Coming back to life as a hillbilly.
5. Bozone (n.): The substance surrounding stupid people that stops bright ideas from penetrating. The bozone layer, unfortunately, shows little sign of breaking down in the near future.
6. Foreploy (n.): Any misrepresentation about yourself for the purpose of getting laid.
7. Giraffiti (n.): Vandalism spray-painted very,very high.
8. Sarchasm (n.): The gulf between the author of sarcastic wit and the Person who doesn't get it.
9. Inoculatte (v.): To take coffee intravenously when you are running late.
10. Osteopornosis (n.): A degenerate disease. (This one got extra credit.)
11. Karmageddon (n.): It's like, when everybody is sending off all these really bad vibes, right? And then, like, the Earth explodes and it's like, a serious bummer.
12. Decafalon (n.): The gruelling event of getting through the day consuming
only things that are good for you.
13. Glibido (n.): All talk and no action.
14. Dopeler effect (n.): The tendency of stupid ideas to seem smarter when they
come at you rapidly.
15. Arachnoleptic fit (n.): The frantic dance performed just after you've accidentally walked through a spider web.
16. Beelzebug (n.): Satan in the form of a mosquito, that gets into your bedroom at two or three in the morning and cannot be cast out.
17. Caterpallor (n.): The color you turn after finding half a worm in the fruit you're eating.
The Washington Post has also published the winning submissions to its yearly contest, in which readers are asked to supply alternate meanings for common words. And the winners are:
1. Coffee, n. The person upon whom one coughs.
2. Flabbergasted, adj. Appalled by discovering how much weight one has
gained.
3. Abdicate, v. To give up all hope of ever having a flat stomach.
4. Esplanade, v. To attempt an explanation while drunk.
5. Willy-nilly, adj. Impotent.
6. Negligent, adj. Absentmindedly answering the door when wearing only a nightgown.
7. Lymph, v. To walk with a lisp.
8. Gargoyle, n. Olive-flavored mouthwash.
9. Flatulence, n. Emergency vehicle that picks up someone who has been run over by a steamroller.
10. Balderdash, n. A rapidly receding hairline.
11. Testicle, n. A humorous question on an exam.
12. Rectitude, n. The formal, dignified bearing adopted by proctologists.
13. Pokemon, n. A Rastafarian proctologist.
14. Oyster, n. A person who sprinkles his conversation with yiddishisms..
15. Frisbeetarianism, n. The belief that, after death, the soul flies up
onto the roof and gets stuck there.
16. Circumvent, n. An opening in the front of boxer shorts worn by Jewish men.
---------------------------------------------------------------------
Wednesday, March 4, 2009
Obama's $75 billion loan modification and refinancing programs
Looks like there is some relief for struggling homeowners. Obviously the plan won't help everyone, but it may stave off dire circumstances for many.
Federal officials release details of $75 billion loan modification and refinancing programs. Borrowers can start contacting loan servicers.
By Tami Luhby, CNNMoney.com senior writer
Last Updated: March 4, 2009: 11:08 AM ET
NEW YORK (CNNMoney.com) -- The Obama administration's foreclosure prevention program is open for business.
The multipronged fix calls for companies to help as many 4 million struggling borrowers by modifying loans so monthly housing payments are no more than 31% of monthly gross income. Separately, homeowners who haven't missed a payment can refinance into lower-cost loans even if they have little or no equity. This is expected to help up to 5 million homeowners.
The $75 billion loan modification plan will provide incentives to borrowers and loan servicers and investors to spur mortgage modifications. The government will also subsidize interest rate reductions to get borrowers to affordable monthly payments.
"This plan will help make home ownership more affordable for nine million American families and in doing so, help to stop the damaging impact that declining home prices have on all Americans," said Housing Secretary Shaun Donovan.
Borrowers can now contact their servicers to see whether they are eligible for assistance. Federal officials will promote the program at homeownership events nationwide.
The administration Wednesday released additional eligibility criteria and program guidelines.
The loan modification plan focuses on people who are behind in their payments or are at risk of default.
Federal officials clarified the definition of "at risk" as those: suffering serious hardships, declines in income or increase in expenses; facing an interest rate hike; having high mortgage debt compared to income; owing more than their house is worth, or demonstrating other reasons for being close to default.
To participate in the loan modification plan, borrowers must:
have obtained their mortgage before Jan. 1, 2009;
have a primary mortgage of less than $729,500;
live in the property;
fully document their income by providing tax returns and pay stubs;
sign a statement of financial hardship; and
go for counseling if their total household debt - including auto loans, credit cards and alimony - totals more than 55% of their income.
The modification program will be in effect until the end of 2012, but loans can only be adjusted once.
Officials also unveiled more details on how servicers will modify the loans. First, they must reduce interest rates so that borrowers' total house payments are not more than 38% of their monthly income. The government will then subsidize servicers dollar-for-dollar to lower that ratio to 31% - but the interest rate can't go below 2%.
The new interest rate would then remain in place for five years, after which it will increase by 1 percentage point a year until it reaches either the original rate or the prevailing mortgage rate at the time of the modification, whichever is lower.
If rate reductions aren't enough to get payments to 31% of income, a lender can extend the term up to 40 years, or shift part of the principal to the end of the loan at no interest. Servicers also have the option of reducing the loan's balance.
Servicers will receive $1,000 for each loan modified, as well as additional annual bonuses if borrowers keep up with payments. Investors will receive one-time $1,500 incentive payments for restructuring qualifying loans that are not yet delinquent. Finally, borrowers who keep up with their new payments will receive up to $1,000 a year in principal reduction, for up to five years.
The program also includes a new provision to eliminate borrowers' second mortgages. Investors in those mortgages, who at times have blocked modifications because they don't benefit from the adjustments, will receive incentives to eliminate those claims. Servicers that get second-mortgage holders to participate will receive an additional $250.
First Published: March 4, 2009: 9:22 AM ET
Federal officials release details of $75 billion loan modification and refinancing programs. Borrowers can start contacting loan servicers.
By Tami Luhby, CNNMoney.com senior writer
Last Updated: March 4, 2009: 11:08 AM ET
NEW YORK (CNNMoney.com) -- The Obama administration's foreclosure prevention program is open for business.
The multipronged fix calls for companies to help as many 4 million struggling borrowers by modifying loans so monthly housing payments are no more than 31% of monthly gross income. Separately, homeowners who haven't missed a payment can refinance into lower-cost loans even if they have little or no equity. This is expected to help up to 5 million homeowners.
The $75 billion loan modification plan will provide incentives to borrowers and loan servicers and investors to spur mortgage modifications. The government will also subsidize interest rate reductions to get borrowers to affordable monthly payments.
"This plan will help make home ownership more affordable for nine million American families and in doing so, help to stop the damaging impact that declining home prices have on all Americans," said Housing Secretary Shaun Donovan.
Borrowers can now contact their servicers to see whether they are eligible for assistance. Federal officials will promote the program at homeownership events nationwide.
The administration Wednesday released additional eligibility criteria and program guidelines.
The loan modification plan focuses on people who are behind in their payments or are at risk of default.
Federal officials clarified the definition of "at risk" as those: suffering serious hardships, declines in income or increase in expenses; facing an interest rate hike; having high mortgage debt compared to income; owing more than their house is worth, or demonstrating other reasons for being close to default.
To participate in the loan modification plan, borrowers must:
have obtained their mortgage before Jan. 1, 2009;
have a primary mortgage of less than $729,500;
live in the property;
fully document their income by providing tax returns and pay stubs;
sign a statement of financial hardship; and
go for counseling if their total household debt - including auto loans, credit cards and alimony - totals more than 55% of their income.
The modification program will be in effect until the end of 2012, but loans can only be adjusted once.
Officials also unveiled more details on how servicers will modify the loans. First, they must reduce interest rates so that borrowers' total house payments are not more than 38% of their monthly income. The government will then subsidize servicers dollar-for-dollar to lower that ratio to 31% - but the interest rate can't go below 2%.
The new interest rate would then remain in place for five years, after which it will increase by 1 percentage point a year until it reaches either the original rate or the prevailing mortgage rate at the time of the modification, whichever is lower.
If rate reductions aren't enough to get payments to 31% of income, a lender can extend the term up to 40 years, or shift part of the principal to the end of the loan at no interest. Servicers also have the option of reducing the loan's balance.
Servicers will receive $1,000 for each loan modified, as well as additional annual bonuses if borrowers keep up with payments. Investors will receive one-time $1,500 incentive payments for restructuring qualifying loans that are not yet delinquent. Finally, borrowers who keep up with their new payments will receive up to $1,000 a year in principal reduction, for up to five years.
The program also includes a new provision to eliminate borrowers' second mortgages. Investors in those mortgages, who at times have blocked modifications because they don't benefit from the adjustments, will receive incentives to eliminate those claims. Servicers that get second-mortgage holders to participate will receive an additional $250.
First Published: March 4, 2009: 9:22 AM ET
Foreclosure Mediation Update
I found some interesting updates on the subject of mediation and foreclosure gleaned from the mediate.com website. With our economy in steep decline, I think we will see more homes lost to foreclosure. Hopefully our legislature will provide some mechanism to provide relief to hard working Americans.
New Jersey launched its mortgage foreclosure mediation program with the enactment of legislation in January. The Mortgage Stabilization Program and Housing Assistance and Recovery Program will be administered by the New Jersey Housing and Mortgage Finance Agency to give homeowners, who are trying to save their primary residence and who are not in bankruptcy, access to counselors, attorneys and mediators. Philadelphia Business Journal (January 9, 2009); NBC40.net (January 9, 2009).
Philadelphia, Pennsylvania’s mortgage foreclosure mediation program has been visited recently by a group from Kentucky and previously by delegations from Maryland, New York and New Jersey. Philadelphia’s program is believed to be successful due to direct outreach to homeowners, rather than simply relying on mailings about the court program. ACORN and 14 other organizations are conducting repeated door-to-door outreach to owners whose homes are in foreclosure. The Legal Intelligencer (January 16, 2009) (Subscription Required).
Nevada is considering legislation to require lenders to enter mediation at the request of homeowners seeking terms to avoid foreclosure. Mediations would be overseen by a judge or magistrate and would halt foreclosure proceedings. Nevada is a nonjudicial foreclosure state, which does not require court involvement before a lender can sell a house, and has the worst foreclosure rate in the country. Some in the industry fear that requiring mediation would be a move towards judicial foreclosures. Reno Gazette Journal (February 10, 2009).
Courts in three Florida counties along the Treasure Coast are considering a proposal to require mediation in foreclosure cases to try to assist homeowners in keeping their houses. The efforts are in response to a doubling of foreclosure cases between 2007 and 2008, and an increase of ten to twenty-fold since 2005. The mediation requirement may be instituted by administrative order in at least one court and apply to new foreclosure cases involving owner-occupied houses. The program would be overseen by a nonprofit mediation group based in Miami. Preventing foreclosure is estimated to cost $3,300, while foreclosure is calculated as costing $150,000 per home. Vero Beach Press Journal (February 13, 2009) (Subscription Required).
The mayor of Milwaukee, Wisconsin is working with courts and lenders to create a foreclosure mediation program that would allow owners facing foreclosure to meet with lenders in a mediation to seek to renegotiate their loans. Milwaukee County foreclosures have tripled from 2006 to 2008. Milwaukee Journal Sentinel (January 16, 2009).
The mayor of Providence, Rhode Island has proposed ordinances to protect both owners and tenants in home foreclosures. The first would require lenders to mediate with homeowners prior to foreclosure, with the assistance of a state agency. The other ordinance would protect renters from having to vacate foreclosed property before their leases end. The proposals are said to be similar to what the Philadelphia County Court has mandated, but concerns have been raised about the enforceability of the mediation ordinance. Providence Journal Bulletin (February 3, 2009) (Subscription Required).
New Jersey launched its mortgage foreclosure mediation program with the enactment of legislation in January. The Mortgage Stabilization Program and Housing Assistance and Recovery Program will be administered by the New Jersey Housing and Mortgage Finance Agency to give homeowners, who are trying to save their primary residence and who are not in bankruptcy, access to counselors, attorneys and mediators. Philadelphia Business Journal (January 9, 2009); NBC40.net (January 9, 2009).
Philadelphia, Pennsylvania’s mortgage foreclosure mediation program has been visited recently by a group from Kentucky and previously by delegations from Maryland, New York and New Jersey. Philadelphia’s program is believed to be successful due to direct outreach to homeowners, rather than simply relying on mailings about the court program. ACORN and 14 other organizations are conducting repeated door-to-door outreach to owners whose homes are in foreclosure. The Legal Intelligencer (January 16, 2009) (Subscription Required).
Nevada is considering legislation to require lenders to enter mediation at the request of homeowners seeking terms to avoid foreclosure. Mediations would be overseen by a judge or magistrate and would halt foreclosure proceedings. Nevada is a nonjudicial foreclosure state, which does not require court involvement before a lender can sell a house, and has the worst foreclosure rate in the country. Some in the industry fear that requiring mediation would be a move towards judicial foreclosures. Reno Gazette Journal (February 10, 2009).
Courts in three Florida counties along the Treasure Coast are considering a proposal to require mediation in foreclosure cases to try to assist homeowners in keeping their houses. The efforts are in response to a doubling of foreclosure cases between 2007 and 2008, and an increase of ten to twenty-fold since 2005. The mediation requirement may be instituted by administrative order in at least one court and apply to new foreclosure cases involving owner-occupied houses. The program would be overseen by a nonprofit mediation group based in Miami. Preventing foreclosure is estimated to cost $3,300, while foreclosure is calculated as costing $150,000 per home. Vero Beach Press Journal (February 13, 2009) (Subscription Required).
The mayor of Milwaukee, Wisconsin is working with courts and lenders to create a foreclosure mediation program that would allow owners facing foreclosure to meet with lenders in a mediation to seek to renegotiate their loans. Milwaukee County foreclosures have tripled from 2006 to 2008. Milwaukee Journal Sentinel (January 16, 2009).
The mayor of Providence, Rhode Island has proposed ordinances to protect both owners and tenants in home foreclosures. The first would require lenders to mediate with homeowners prior to foreclosure, with the assistance of a state agency. The other ordinance would protect renters from having to vacate foreclosed property before their leases end. The proposals are said to be similar to what the Philadelphia County Court has mandated, but concerns have been raised about the enforceability of the mediation ordinance. Providence Journal Bulletin (February 3, 2009) (Subscription Required).
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