In response to the looming foreclosure crisis in Milwaukee, Marquette University Law School, in partnership with the United States Department of Housing and Urban Development and the Urban Economic Development Association convened a Task Force in early 2007 whose members consisted of government regulators, lenders, and consumer representatives. By September of 2008, Milwaukee Mayor Tom Barrett launched the Milwaukee Foreclosure Partnership Initiative (MFPI) to strengthen the work of the Task Force and consolidate it with a city led effort to address the foreclosure crisis in Milwaukee. MFPI formed three working groups (Prevention, Intervention and Stabilization) to craft recommendations to respond to the foreclosure crisis. In its final report to MFPI, the Intervention Workgroup reported, “A key to stemming the number of foreclosure filings resulting in sheriff sale is to ensure that the lender or loan servicer and the homeowner communicate for the purposes of reviewing the potential for loan modification or workout. When successful, these efforts allow the homeowners to retain their homes, protect their credit and achieve long-term affordability.” Based upon this finding, both the Intervention and the Stabilization workgroups recommended the launch of a court-based foreclosure mediation program. The primary program goals were:
- Increase the number of homeowners who negotiate a settlement alternative with their lender by facilitating information flow and decision-making authority through mediation;
- Reduce the adverse social and economic consequences of foreclosures on Milwaukee families and the community; and
- Stabilize property values and neighborhoods by reducing the number of vacant or abandoned foreclosed homes in Milwaukee neighborhoods.
The MFPI Steering Committee adopted these recommendations and asked that a Foreclosure Mediation Committee be formed to develop and implement a mediation program in Milwaukee County. Based on a survey of model programs in other jurisdictions, the Foreclosure Mediation Committee concluded that a successful program should include several core characteristics: voluntariness, neutrality, confidentiality, housing counseling and information referral, and a scope broad enough to address retention as well as transition options. The Committee decided upon a model that would provide administrative screening and support as well as staff mediators, a volunteer recruitment effort, a housing counseling referral network, and an option for independent legal counsel through the Legal Aid Society of Milwaukee.
Marquette University Law School, with its established Alternative Dispute Resolution program, was selected to administer the program. Seed money to launch the Milwaukee Foreclosure Mediation Program was provided by the City of Milwaukee through a special resolution of the Common Council and an agreement with the Department of City Development. Operational funding was allocated to Marquette by the Wisconsin Attorney General, J.B. Van Hollen, from settlements with national mortgage servicing companies. To ensure program sustainability and participant commitment to the mediation process, a small fee was assessed both parties once the mediation was approved. The program launched in July of 2009 through a Directive from Judge Jeffrey Kremers, Wisconsin Court District One Chief Judge, requiring that all residential foreclosure Summons include a Notice and Application for Mediation. Program staff was housed at the Milwaukee County Courthouse through the support of John Barrett, Clerk of Circuit Court.
Marquette University Law School served as the program administrator until February of 2012, having built a self-sufficient staff and referral network, engaged volunteers, and facilitated more than 1500 mediations. During this time, MFMP Chief Mediator worked with the federal bankruptcy court in the Eastern District of Wisconsin to establish a voluntary foreclosure mediation program for residential homeowners in bankruptcy proceedings. Metro Milwaukee Mediation Services, a not-for-profit organization was created to manage the foreclosure mediation program with the same core staff beginning in March of 2012.
The Program’s success, as well as the ongoing need for foreclosure mediation services, resulted in the allocation of funding support by the Wisconsin Attorney General from the National Mortgage Settlement Fund in the fall of 2012. This Department of Justice dedicated funding will sustain operations through 2013, with the potential for continuation until 2015. Additional funding was approved by the Department of Justice to replicate a refined model of the Milwaukee Foreclosure Mediation Program throughout the State of Wisconsin and to provide support to existing mediation programs in other areas of Wisconsin. The Wisconsin Foreclosure Mediation Network was officially launched on December 21, 2012 and has already engaged mediation programs in central, northeastern and western Wisconsin, as well as addressed the chief judges in every Wisconsin judicial district.