DC Approves Saving DC Homes from Foreclosure Act

November 24, 2010

On October 27, 2010, Washington, D.C. Attorney General Peter Nickles issued a Statement of Enforcement.

On November 17, 2010, the Mayor of the District of Columbia signed the Saving DC Homes from Foreclosure Emergency Act of 2010.

The Act states that a foreclosure sale under a power of sale provision contained in any deed of trust, mortgage or other security instrument, can not take place unless the holder of the note secured by the deed of trust, mortgage, or security instrument, or its agent, gives written notice of the intention to foreclose, by certified mail, postage prepaid, return receipt requested, and by first‐class mail, of the sale to the borrower and, if different from the borrower, to the person who holds the title of record, of the real property encumbered by the deed of trust, mortgage, or security instrument at his last known address. A copy of the notice must also be sent to the Mayor, at least 30 days in advance of the date of the sale.

Further, the Act requires the following actions BEFORE a foreclosure sale takes place:

  • After a notice of default of a residential mortgage has been given and a mediation election form is mailed to a borrower in default of a mortgage loan, the lender will be required to engage in mediation if the borrower elects to participate ;

Note: A notice of default from the lender must include: (a) contact information the borrower may use to reach an agent or representative of the lender with authority to explain the mediation process, (b) a statement recommending that the borrower seek housing counseling services (c) contact information for at least one local housing counseling agency approved by the Department of Housing and Urban Development (HUD), (d) information about loss mitigation programs available from the lender, and (e) a mediation election form, in a form prescribed by the Mediation Administrator, with one envelope addressed to the lender, and one envelope addressed to the Mediation Administrator. A copy of the notice of default would also be provided to the Department of Insurance, Securities, and Banking (DISB)

  • The lender is required to pay a fee of $300 for each notice of default issued on residential mortgage. If the power of sale a property is exercised, the lender is allowed to recover the $300 fee from the proceeds of sale if there is any amount remaining after the payment of all amounts due and owing by the borrower on the residential mortgage and the costs of the sale. The lender is not permitted to recover mediation fee paid if there is a deficiency upon the sale of the foreclosed property;
  • Within 7 days of mailing of the notice of default by the lender, the Mediation Administrator will mail the specified information to the borrower about the mediation process, a statement recommending the borrower seek housing counseling services and information about these services, and a request for the borrower to return the loss mitigation application to the lender and the mediation election form to the Mediation Administrator and lender in the envelopes provided no later than 30 days from the date of the mailing of the notice of default by the lender. The Mediation Administrator will also include a statement that the borrower will lose the right to participate in mediation if the mediation election form and the loss mitigation application are not returned within the specified 30 day timeframe, a statement that borrower has to pay a $50 fee to the District of Columbia to participate in mediation; otherwise, the borrower will be considered to have forfeited the right to mediation, and a statement that mediation will be held 45 days after the date of the mailing of the mediation election form;
  • Within 20 days of mailing of the mediation election form to the borrower by the lender, the Mediation Administrator will send a 2nd notice to the borrower with all the information specified above, including a statement that the borrower must take immediate action to avoid foreclosure;
  • The Mediation Administrator will assign a mediator and schedule a mediation session within 45 days of the mailing of the notice of default for each borrower electing to participate in mediation, and will issue a mediation certificate to the lender if a borrower chooses to waive the right to mediation. The power of sale under a mortgage will not be exercised until the Mediation Administrator has issued a Mediation Certificate;
  • If the lender or a representative fails to attend the mediation, fails to participate in the mediation in good faith, or does not bring to the mediation all required documents, the Mediation Administrator is authorized to impose a $500 penalty against the lender. Any lender who breaches the terms of the settlement agreement would pay a penalty of $1,000 and be required to perform the terms of a settlement agreement;
  • If the borrower breaches the terms of the settlement agreement entered into during mediation, the lender will be allowed to apply to the Mediation Administrator for a Mediation Certificate;
  • The mediation will conclude within 90 days of the mailing of the notice of default and mediation election form by the lender, unless extended for an additional 30 days by the mutual consent of both parties;
  • If the mediator determines that the parties, while acting in good faith, cannot agree to any loss mitigation options in lieu of foreclosure, the mediator will submit a form to the Mediation Administrator recommending the matter be terminated. Within 5 days of receiving the mediator’s report, the Mediation Administrator may issue a Mediation Certificate to the lender or refer the matter to another mediator;
  • Each foreclosure sale in violation of the Act is considered void;
  • All foreclosure sales occurring November 17, 2010 or after, a Mediation Certificate must be recorded among the DC Land Records PRIOR to the issuance and recordation of the Notice of Foreclosure.


  • Foreclosure sales which are completed PRIOR to the effective date of the Act should not be subject to the provisions of the Act.
  • The participation in mediation shall NOT waive any other legal claims the lender or borrower may have against each other
  • The Act expires February 15, 2011 unless extended

Freddie Mac Door Knocking Delinquents

October 4, 2009


Freddie Mac has contracted Titanium Solutions, a third-party servicer, to go to the homes of delinquent borrowers to get the missing information and documentation necessary to start three-month long trial repayments under the  Home Affordable Modification Program (HAMP).

“By meeting with our borrowers, one on one, Titanium Solutions can help them overcome the roadblocks keeping them from starting their Home Affordable Modification trial periods,” said Ingrid Beckles, Freddie Mac senior vice president, default asset management.  As a fraud prevention measure, Titanium representatives will not be allowed to accept mortgage payments or any other money from borrowers, Freddie Mac said. Representatives will also carry a copy of the solicitation letter the borrower initially received from their servicer, which contains unique information about the borrower’s loan.

In addition to the door-to-door campaign, Freddie Mac sends representatives to foreclosure mediation events put on by the Treasury Department and has hired Home Retention Services, a subsidiary of Stewart Lender Services, to process the backlog of modification applications from distressed borrowers with Freddie Mac mortgages. Home Retention Services will assess the eligibility of delinquent borrowers with Freddie Mac-owned mortgages for Home Affordable Modifications or other possible workouts and process borrower financial information for the servicers’ review and approval. While the new initiative will supplement the capacity of participating servicers to process loan modifications, Beckles emphasized that “borrowers should continue to call their servicers first to determine the best solution for their situation.”

Potentially eligible borrowers identified by a participating Freddie Mac servicer will receive a letter from Freddie Mac asking them to call Home Retention Services using a proprietary toll-free number. The letters will be specially formatted and include unique borrower PIN numbers to protect borrowers from counterfeits produced by fraud artists.

Home Retention Services will work with the borrower, assess their eligibility for a Home Affordable Modification, complete the documentation and income gathering processes, and advise the borrower of their proposed modified payment. Home Retention Services will forward the completed package to the servicer for final approval. The borrower’s Home Affordable Modification trial period begins once the servicer approves the modification and receives the borrower’s check for the new monthly mortgage amount.

Home Retention Services will also advise borrowers of other Freddie Mac workout options if they don’t qualify for Making Home Affordable.

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