US mayors urge states to require mortgage mediation

Thu Jun 11, 2009 10:57pm BST
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* NYC, Los Angeles, Miami, St. Louis, Oakland involved

* Plan based on program in Philadelphia

By Jon Hurdle

PHILADELPHIA, June 11 (Reuters) - Mayors from five U.S. cities called on Thursday for states to pass laws that would require mortgage lenders to negotiate with borrowers who are threatened with foreclosure.

The mayors of New York City, Los Angeles, Miami, St. Louis and Oakland, California, said mandatory mediation offers the best hope of stemming a national foreclosure crisis that led to an 18 percent surge in foreclosure filings in May compared with a year earlier.

The mayors aim to follow up on a year-old program in Philadelphia that brings lenders and borrowers together under court supervision, and has allowed more than 70 percent of participating homeowners to remain in their homes.

"Many local governments are turning to the Philadelphia model," Bertha Lewis, chief executive of Acorn, a national community organization that has been active in trying to curb foreclosures, told reporters during a conference organized by the U.S. Conference of Mayors.

While Philadelphia has been able to implement its mortgage foreclosure protection plan unilaterally, other cities represented on the call would need a change in state law to implement such a program, said Elena Temple, a spokeswoman for the mayors' organization.

1,200 HOMES SAVE IN PHILADELPHIA  Continued...

 
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