Eighteen months after the New Hampshire court system created a mediation program for homeowners facing foreclosure, it has seen limited success. Of more than 100 cases initiated, 14 have reached settlements.

But Karen Borgstrom, director of the Office of Mediation and Arbitration for the judicial branch, expects to see better results soon, now that superior court judges are beginning to order parties into mediation in foreclosure cases before them.

Borgstrom explained that the court system's “Rule 170,” which allows for “alternative dispute resolution,” can apply to cases in which a borrower has asked the court to grant an injunction putting off foreclosure. If the judge agrees the borrower has met the standard for granting an injunction, she said, the judge can then refer both borrower and lender to the mediation program.

“And because it's a court order, it's a little bit easier to get the lenders” involved, Borgstrom said.

Because New Hampshire does not have judicial foreclosure, which resolves foreclosures through the court system, the mediation program was designed as a voluntary one, to get borrowers and lenders to work together. It relies on trained volunteers to mediate an agreement between parties and is provided free of charge.

But because it has been voluntary, Borgstrom said, she has been having trouble getting some lenders to participate.

Local lenders “have been terrific,” Borgstrom said, and some larger lenders, notably Chase and Bank of America, are also participating. But in some cases, she said, even she has had a difficult time tracking down the right person to speak with at some of the servicers involved in these troubled home loans.

To date, according to Borgstrom, of the 102 cases initiated on the voluntary side of the program, 14 were resolved; four remain unsettled; four have gone to auction; four were canceled by the borrower (or the borrower filed bankruptcy); two were canceled by the lender; one borrower did not attend the mediation appointment; seven were declined by the lenders for not meeting their criteria for mediation; and one lender did not respond. Four other cases were closed for other reasons. There are 61 cases “still in the pipeline,” Borgstrom said.

Borgstrom said she believes the program's new focus on court-ordered mediation could speed things up, since both parties will actually be in court together when mediation is ordered.

Of the 18 cases ordered through the superior court since April, Borgstrom said, three were resolved, eight were mediated but not resolved and seven are still in the process.

A lot of the trouble between lenders and borrowers seems to stem from a communication problem, Borgstrom said.

Borrowers tell her they've tried to contact their lenders without success; lenders say the converse is true. “Our best successes have been when we've actually gotten people to the table,” she said.

She also encourages borrowers to work with the HUD-approved (Housing and Urban Development) housing counseling agencies that provide free assistance.

Borgstrom said she had hoped to see more mediation cases resolved to date. “I wish the pace could be faster, but it just doesn't seem to be possible because the communication issues are still difficult. And also the documents that people are trying to exchange in order to make the mediation fruitful are difficult,” she said.

But that doesn't mean the program isn't working, she said. “For me, if we have managed to save one house from foreclosure for a borrower and provide for a lender a reworked, healthy loan, I feel like it's a success.

“From my perspective, the program is working, but in a way that's slower than I'd like,” she said. “But we've had some successes, and I'm proud of those.”

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For information about the Foreclosure Mediation Program, contact the Office of Mediation and Arbitration at 271-6418, ext 341, or visit: www.courts.state.nh.us/adrp/foreclosure/.