The FFA requires that we not schedule the mediation until both parties have sent us their waiver form - the one where they waive the right to call us as a "live witness" (whatever the heck that means) in any litigation pertaining the foreclosure action.

If one party fails to sign the waiver, that could be seen as a failure to timely participate in mediation without good cause and therefore may constitute a violation of the duty to mediate in good faith. For the borrower, that could provide a defense to the foreclosure; for the beneficiary, it could allow them to proceed with the foreclosure.

So that's how the failure of a party to provide the waiver could be to the other party's benefit, establishing a very real legal right on them and placing a very severe legal obligation on the other party.

So here's the question: on not receiving a waiver from one party, would you send them a reminder?

Normally it's so very common for us to help the parties engage - to come to an agreement on a process in which they can negotiate. Cajoling and reminding is a regular part of the convening process.

Yet if you cajole and remind a party to provide the waiver, aren't you risking, on the part the party that did provide the waiver, the loss of a very real legal benefit? And if so, aren't you favoring that non-responsive party over the one that did follow the rules?

This is an instance where I see that in following our "normal" way of doing things we could actually be acting very partially and with severe detriment toward a party, in violation of our standard of impartiality.

Thoughts?

 

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Replies to This Discussion

I will definitely call or send a reminder.  From my perspective as a mediator, the only consequence of not sending the waiver is that the mediation can't take place.  Since I view mediation as a good thing for both parties, it is to both parties' benefit for me to do what I can to see that it happens.  The alternative (not sending the reminder, then calling bad faith on the party who didn't send the waiver), seems much worse to me; it really does make mediation the "stick."
I'd suggest that when you venture from normal practice - that is when the specter of partiality raises its head. To my mind custom and practice set the bar for expectation. I'd also remind people that borrowers are frequently overwhelmed and often even depressed in foreclosures and thus not tracking all requirements. And lenders are overwhelmed with the sheer numbers of foreclosures and have been overwhelmed with paper work, records and the like and losing papers in the flood.

I certainly agree, Roger, that if one varies from their normal practice, without considering intentionally how the change may serve the underlying value and principle of impartiality, one risks acting partially. Yet that can also happen if we apply our same "normal" practice to a different process, where there is no custom, without thoughtfully considering whether the old practice serves the principle in the new process.

And here, this is a very different process: the statute confers a very significant legal benefit on a borrower who provides the waiver if the beneficiary hasn't: a complete defense to the foreclosure action.

In suggesting we look at how our "normal" practice of active engagement may play out here and may be experienced as impartiality, I suggest we look at the experience from the parties' perspective, rather than from preconceived judgments about what we think is good for the parties. So think of this hypothetical from the perspective of the borrower:

  • Borrower faces foreclosure action and loss of home  - not good;
  • Borrower gets help and referral to FFA mediation; may result in a loan mod, so things are looking up;
  • Borrower sends in waiver, showing intent to timely participate in mediation; beneficiary fails to do so; if the situation does not change, Borrower has a complete defense to defeat a subsequent foreclosure action - that could be a great situation for Borrower to be in;
  • Mediator reminds Beneficiary to send in waiver (once? twice?) and Beneficiary sends it in; mediation will now proceed;
  • Mediation proceeds, borrower does not qualify for loan mod under NPV calcualation and beneficiary is otherwise unwilling to agree to one; borrower loses home.

Looking at it from the borrower's perspective, the borrower may find the defense to the foreclosure a much greater benefit than having the mediation, regardless of what we as mediators may think about mediation's value.

Thanks for raising the "stick" issue, Estera. We just can't get away from the fact that the statute was written to be a "stick." It's very much skewed to the benefit of borrowers and to incentivize beneficiaries to participate in mediation and to restrict their choices. In its "stick-effect," it's hugely partial. So we as mediators are in the cunundrum of of impartially mediating under a very partial statute!

It's in the sorting-through of this paradox that I'm coming to my thoughts on how to approach this. The rights of the parties in the subsequent foreclosure action aren't determined until we make our certifications. It is only after that certification that the statute operates, on its own, to create a very partial effect based on my certification. It is in this 45-day space that I have the room to act impartially. So I'm thinking of sending a reminder in this situation.

That is how I'm going to impartially mediate under this partial "stick-like" statute. Sounds like it's the same place, Roger and Estera, you wound-up - I just had to take the long way around. Thanks for helping me get there!

Jeff,

 

I'm curious - you seem to think being reminded of the need to send in the waiver form to have a mediation will tip the borrower towards having the mediation, and a loss of advantage in not defending against the foreclosure. Two things come up for me in that- not sending it in , after requesting a mediation, could be construed as not participating in good faith - undercutting the defense. And also remembering that the borrower asked for the mediation I would assume they want it - and merely reminding them of the waiver form seems not to be significant "pressure" to abandon the defense.


Jeff Bean said:

I certainly agree, Roger, that if one varies from their normal practice, without considering intentionally how the change may serve the underlying value and principle of impartiality, one risks acting partially. Yet that can also happen if we apply our same "normal" practice to a different process, where there is no custom, without thoughtfully considering whether the old practice serves the principle in the new process.

And here, this is a very different process: the statute confers a very significant legal benefit on a borrower who provides the waiver if the beneficiary hasn't: a complete defense to the foreclosure action.

In suggesting we look at how our "normal" practice of active engagement may play out here and may be experienced as impartiality, I suggest we look at the experience from the parties' perspective, rather than from preconceived judgments about what we think is good for the parties. So think of this hypothetical from the perspective of the borrower:

  • Borrower faces foreclosure action and loss of home  - not good;
  • Borrower gets help and referral to FFA mediation; may result in a loan mod, so things are looking up;
  • Borrower sends in waiver, showing intent to timely participate in mediation; beneficiary fails to do so; if the situation does not change, Borrower has a complete defense to defeat a subsequent foreclosure action - that could be a great situation for Borrower to be in;
  • Mediator reminds Beneficiary to send in waiver (once? twice?) and Beneficiary sends it in; mediation will now proceed;
  • Mediation proceeds, borrower does not qualify for loan mod under NPV calcualation and beneficiary is otherwise unwilling to agree to one; borrower loses home.

Looking at it from the borrower's perspective, the borrower may find the defense to the foreclosure a much greater benefit than having the mediation, regardless of what we as mediators may think about mediation's value.

Thanks for raising the "stick" issue, Estera. We just can't get away from the fact that the statute was written to be a "stick." It's very much skewed to the benefit of borrowers and to incentivize beneficiaries to participate in mediation and to restrict their choices. In its "stick-effect," it's hugely partial. So we as mediators are in the cunundrum of of impartially mediating under a very partial statute!

It's in the sorting-through of this paradox that I'm coming to my thoughts on how to approach this. The rights of the parties in the subsequent foreclosure action aren't determined until we make our certifications. It is only after that certification that the statute operates, on its own, to create a very partial effect based on my certification. It is in this 45-day space that I have the room to act impartially. So I'm thinking of sending a reminder in this situation.

That is how I'm going to impartially mediate under this partial "stick-like" statute. Sounds like it's the same place, Roger and Estera, you wound-up - I just had to take the long way around. Thanks for helping me get there!

Roger, sorry for being unclear - a significant risk in having written a longish post, not having taken the time to write a shorter one!

The hypothetical situation I'm positing is where the Borrower has already sent in the waiver, and where the Beneficiary has not. If it remains that way at the end of the 45-day period for the mediation, it is the Beneficiary who could be found, in the mediator's discretion, to have failed to timely participate in the mediation.

I would certainly agree with you that in the opposite situation of a Borrower not sending in the waiver, and the Beneficiary has, then the Borrower could be found in the mediator's discretion to have failed to timely participate in the mediation. But in that case the Borrower also doesn't have a defense to the foreclosure, and in fact, the Beneficiary then has the right to proceed with foreclosure.

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