Just as some states are giving up on their foreclosure mediation programs (see my note on the demise of Florida’s program here), the Department of Justice is urging greater investment in foreclosure mediation. Through the report of its Access to Justice Initiative, DOJ makes a number of recommendations, including increased research and evaluation of state foreclosure mediation programs, federal funding for mediation programs that meet federal guidelines, and requiring that federally-backed loans go through mediation before foreclosure can take place. Along similar lines, the Federal Reserve had recommended aggressive use of loan modifications and other alternatives to foreclosure last week.
That should help to prevent unnecessary foreclosures. It’s important to consider the depth of the benefits of things like this to society. When people are able to keep their houses, and keep their heads above water financially- they are much more likely to do good things for society, as opposed to what people are prone to do out of anger or desperation.