941402 The Acting Commissioner of the Department of Insurance, Securities and Banking will adopt rules to implement the Foreclosure Mediation Program established by the Saving D.C. Homes from Foreclosure Amendment Act of 2010 in not less than ten (...
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DISTRICT OF COLUMBIA
DEPARTMENT OF INSURANCE, SECURITIES AND BANKING
NOTICE OF PROPOSED RULEMAKING
The Acting Commissioner of the Department of Insurance, Securities and Banking (Department), pursuant to the authority set forth in Mayor’s Order 2011-51, dated March 2, 2011, and section 539b(i) of An Act To establish a code of law for the District of Columbia, approved March 3, 1901 (31 Stat. 1189), as amended by the Saving D.C. Homes from Foreclosure Congressional Review Emergency Amendment Act of 2011, effective February 11, 2011 (D.C. Act 19-008; 58 DCR 1418) (Act), and any similar succeeding legislation, hereby gives notice of his intent to adopt the following amendment to add a new chapter 27 entitled, FORECLOSURE MEDIATION, to subtitle C of title 26 of the District of Columbia Municipal Regulations, in not less than ten (10) days from the date of the publication of this notice in the D.C. Register.
This proposed rulemaking is necessary to implement section 539b(i) of the Act by establishing a foreclosure mediation program (Program) in the Department which will assist homeowners and provide, where appropriate, an alternative to foreclosure. The Act became effective on March 28, 2011. However, the provisions contained in the Act first became effective on an emergency basis on November 17, 2010, pursuant to the enactment of the Saving D.C. Homes from Foreclosure Emergency Amendment Act of 2010, effective November 17, 2010 (D.C. Act 18-599; 57 DCR 11026). The Act provides that no foreclosure of residential mortgages may be initiated in the District of Columbia until the rulemaking is adopted with its attendant forms.
The promulgation of this rulemaking on an expedited basis is necessary for the immediate implementation of the Program to provide important safeguards for residents of the District of Columbia who have a mortgage default and face the danger of losing their homes to foreclosure. Additionally, the immediate commencement of the Program will enable residential mortgage lenders to reduce expeditiously the backlog of mortgage defaults that have accumulated, and provide lenders with the ability to resolve non-performing mortgages. The shortened public comment period will not adversely affect the public’s right to prepare and submit comments of the rules. The Department has discussed publicly the Act and its implementing rules with the public for the last several months. Additionally, the Department has shared drafts of the rules with interested and affected parties. The Department also sought input on the rules from a stakeholder group that included consumer advocates, a mortgage banker, mortgage lender counsel, a real estate legal expert, a housing counselor, foreclosure counsel, a law school professor, the Recorder of Deeds, a title insurer, a member of the District of Columbia Bar’s Real Estate Section, and an auctioneer. The Department believes that the stakeholder group provided a comprehensive cross section of foreclosure community and provided interested and affected parties engaged in the foreclosure process in the District of Columbia with the opportunity to present their views regarding the proposed rules. Accordingly, the Acting Commissioner hereby gives notice of his intent to adopt, in not less than ten (10) days from the date of publication of this notice in the D.C. Register, the following proposed rules.
A new chapter 27 is added to subtitle C of title 26 of the D.C. Municipal Regulations as follows:
CHAPTER 27
FORECLOSURE MEDIATION
2700 SCOPE
2700.1 Unless specified otherwise, these regulations shall apply to the foreclosure mediation rights and procedures established for the exercise of power of sale of a residential mortgage as defined in the Act.
2700.2 The Act requires the completion of forms or other documents for certain activities covered by the Act. Those requirements shall be satisfied solely through the use of forms prescribed or authorized by this chapter.
2700.3 These regulations set forth the procedures for filing an Affidavit of Non-Residential Mortgage Foreclosure in order to issue and record a Notice of Foreclosure for the foreclosure of a mortgage other than a residential mortgage for which a Mediation Certificate is not required to be recorded.
2700.4 These regulations shall not apply to a foreclosure by a condominium association against an owner, or housing cooperative association against a member, when the foreclosure is brought for a reason other than a default on a residential mortgage.
2701 NOTICE OF DEFAULT ON RESIDENTIAL MORTGAGE
2701.1 The requirement that a Notice of Default on Residential Mortgage be provided by a lender to each borrower as a condition of issuance of a Notice of Intention to Foreclose a Residential Mortgage shall be satisfied by completing and mailing the authorized Notice of Default on Residential Mortgage set forth in section 2791 to each borrower for the real property for which the Notice of Default on Residential Mortgage is being issued.
2701.2 A Notice of Intention to Foreclose a Residential Mortgage shall be null and void with respect to a foreclosure of a residential mortgage unless a Notice of Default on Residential Mortgage is mailed to each borrower subject to the residential mortgage as required by the Act and this chapter, and the lender receives and records at the District of Columbia Office of the Recorder of Deeds, prior to recording the Notice of Intention to Foreclose a Residential Mortgage, a Mediation Certificate provided pursuant to the Act and this chapter.
2702 COMPLETION OF NOTICE OF DEFAULT ON RESIDENTIAL MORTGAGE INSTRUCTIONS
2702.1 The Notice of Default on Residential Mortgage (Form FM-1) shall contain all required information as specified in the applicable form in order to satisfy the requirements of section 539b of the Act. The Notice of Default on Residential Mortgage is set forth in section 2791.
2702.2 The lender or the lender’s agent shall be responsible for the completion of the Notice of Default on Residential Mortgage.
2702.3 A Notice of Default on Residential Mortgage, including all information required by subsection 2703.4, shall be completed for each borrower for the property for which the Notice of Default on Residential Mortgage will be issued.
2702.4 Except as provided by subsection 2702.5, a Notice of Default on Residential Mortgage (Form FM-1) that is not in the form prescribed by subsection 2701.1 shall be void and shall not be in compliance with section 539b of the Act.
2702.5 A lender may include a supplement to a Notice of Default on Residential Mortgage that provides additional information or contractual disclosures required by a mortgage to the borrower provided the supplement is a separate attachment at the end of the Notice of Default on Residential Mortgage and is entitled “Supplement” and provides the reason the information is being provided.
2703 MAILING OF NOTICE OF DEFAULT ON RESIDENTIAL MORTGAGE
2703.1 A lender issuing a Notice of Default on Residential Mortgage shall mail, by certified first-class mail, postage prepaid, return receipt requested, and by first-class mail, the Notice of Default on Residential Mortgage, including all information required by subsection 2703.4, upon each borrower for the property subject to the residential mortgage for which the Notice of Default on Residential Mortgage is issued.
2703.2 In the event there is more than one (1) borrower for the property subject to the residential mortgage for which the Notice of Default on Residential Mortgage is issued, the Notice of Default on Residential Mortgage shall be mailed to all borrowers on the same day.
2703.3 The Notice of Default on Residential Mortgage mailed to a borrower pursuant to subsection 2703.1 shall be mailed in an envelope that contains the following legend on the front of the envelope below the name and address of the borrower: “Important Information Regarding Your Home – Please Open and Read Immediately. You have 30 days to choose Mediation before your home could go to Foreclosure Sale”.
2703.4 Each copy of the Notice of Default on Residential Mortgage mailed to a borrower for the property subject to the residential mortgage for which the Notice of Default on Residential Mortgage is issued shall be accompanied by the following:
(a) Borrower Assistance and Resource Information Form (Form FM -1BA), with all information to be provided by the lender as required by Form FM-1BA.
(b) Contact information which the borrower may use to reach an agent or representative of the lender with authority to explain the mediation process.
(c) A description of all loss mitigation programs available from the lender and applicable to the residential mortgage for which the Notice of Default on Residential Mortgage is being issued. For each loss mitigation program, the lender shall provide a description of the eligibility requirement(s) and documentation necessary for the loss mitigation programs applicable to the residential mortgage subject to the Notice of Default on Residential Mortgage.
(d) Loss Mitigation Application (Form FM -1LM), with all information required by Form FM-1LM).
(e) Instructions for completing and mailing the Loss Mitigation Application.
(f) A Mediation Election Form (Form FM-2).
(g) A nine by twelve (9 x12) envelope for the borrower to return the Mediation Election Form (Form FM-2) and Loss Mitigation Application (Form FM -1LM), to the lender. The envelope shall be preaddressed to the lender's office that will review the Loss Mitigation Application and prepare the loss mitigation analysis required by section 2714.
(h) A nine by twelve (9 x 12) envelope for the borrower to file the Mediation Election Form (Form FM-2) and a copy of the Loss Mitigation Application (Form FM -1LM), with the Mediation Administrator. The envelope shall be preaddressed as follows:
Mediation Administrator
Department of Insurance, Securities and Banking
810 First Street, NE
Suite 701
Washington, DC 20002.
2703.5 A copy of a Notice of Default on Residential Mortgage mailed to a borrower pursuant to subsection 2703.1 shall be submitted by the lender to the Mediation Administrator by electronic mail and regular first class mail on the same day that the Notice of Default on Residential Mortgage is mailed to the borrower(s) for the property subject to the residential mortgage for which the Notice of Default on Residential Mortgage is issued.
2703.6 Each Notice of Default on Residential Mortgage submitted to the Mediation Administrator pursuant to subsection 2703.5 shall be accompanied by a fee in the amount of three hundred dollars ($300) in the form of a money order or check payable to the “District of Columbia Treasurer.” No other form of payment will be accepted.
2703.7 Any Notice of Default on Residential Mortgage that is submitted to the Mediation Administrator pursuant to subsection 2703.5 that does not include the fee required pursuant to subsection 2703.6 shall be cancelled and the Mediation Administrator shall notify each mortgage borrower that was issued the Notice of Default on Residential Mortgage by the lender of the cancellation.
2703.8 Any costs incurred by the lender in connection with a Notice of Default on Residential Mortgage that is cancelled pursuant to subsection 2703.7 shall not be assessed to any residential borrower.
2703.9 Each copy of the Notice of Default on Residential Mortgage submitted to the Mediation Administrator shall be accompanied with an Affidavit of Mailing of Notice of Default Form FM-1A for each borrower to whom the Notice of Default on Residential Mortgage was mailed as required pursuant to subsection 2704.1.
2703.10 Each copy of the Notice of Default on Residential Mortgage submitted to the Mediation Administrator shall be accompanied with a completed Lender Foreclosure Mediation Agent Contact Form (Form FM-1AC) which requires the lender to provide the name and contact information for the individual or business group responsible for coordinating the default and foreclosure process.
2703.11 The Lender Foreclosure Mediation Agent Contact Form required by subsection 2703.10 shall be in the form contained in the Lender Foreclosure Mediation Agent Contact Form (Form FM-1AC), as prescribed by the Commissioner and available on the Commissioner's website at http://disb.dc.gov, and shall include all information specified in Form FM-1AC.
2703.12 The Mediation Administrator shall include a copy of the Notice of Default on Residential Mortgage received from a lender in the notices required to be mailed by the Mediation Administrator to a borrower subject to Notice of Default on Residential Mortgage pursuant to section 539b(c)(1) and (2) of the Act.
2704 AFFIDAVIT OF MAILING NOTICE OF DEFAULT
2704.1 A lender or the lender’s agent shall execute an Affidavit of Mailing of Notice of Default for each borrower to whom the lender for a residential mortgage mailed the Notice of Default on Residential Mortgage.
2704.2 The Affidavit of Mailing of Notice of Default required by subsection 2704.1 shall be in the form contained in the Affidavit of Mailing of Notice of Default (Form FM-1A), as prescribed by the Commissioner and available on the Commissioner's website at http://disb.dc.gov, and shall include all information specified in Form FM-1A.
2704.3 A lender shall submit, to the Mediation Administrator with a Notice of Default on Residential Mortgage, each Affidavit of Mailing of Notice of Default executed for each borrower to whom the lender mailed the Notice of Default on Residential Mortgage.
2704.4 A lender shall retain all evidence of mailing, including the Affidavit of Mailing of Notice of Default, of a Notice of Default on Residential Mortgage to each borrower for a period of two (2) years.
2705 BORROWER ASSISTANCE AND RESOURCE INFORMATION FORM
2705.1 The Borrower Assistance and Resource Information Form required by subsection 2703.4(a) shall be in the form contained in the Borrower Assistance and Resource Information Form (Form FM-1BA), as prescribed by the Commissioner and available on the Commissioner's website at http://disb.dc.gov, and shall include all information required in Form FM-1BA.
2706 MEDIATION ELECTION FORM
2706.1 The Mediation Election Form required by subsection 2703.4(f) shall comply with the authorized Mediation Election Form set forth in section 2792.
2706.2 Each Mediation Election Form mailed to a borrower shall include all information required in Form FM-2.
2707 LOSS MITIGATION APPLICATION
2707.1 The Loss Mitigation Application required by subsection 2703.4(c) shall comply with the authorized Loss Mitigation Application established by section 2793.
2701.2 Each Loss Mitigation Application mailed to a borrower shall include all information required in Form FM-1LM.
2708 ELECTION TO PARTICIPATE IN MEDIATION
2708.1 A borrower who receives a Notice of Default on Residential Mortgage pursuant to section 2703 shall be eligible for mediation prior to the issuance of a Notice of Foreclosure of a Residential Mortgage by making an election pursuant to subsection 2708.2 within thirty (30) days of the date of the Notice of Default on Residential Mortgage.
2708.2 To elect to participate in mediation pursuant to this chapter, a borrower shall, within thirty (30) days of the date of the Notice of Default on Residential Mortgage:
(a) Complete and mail, using the preaddressed envelope, to the lender the Loss Mitigation Application Form (FM –1LM) included with the Notice of Default on Residential Mortgage (Form FM –1) received from the lender and a copy of the Mediation Election Form (Form FM -2) to be sent to the Mediation Administrator pursuant to paragraph (b) of this subsection; and
(b) Complete and mail, using the preaddressed envelope, to the Mediation Administrator the following:
(1) The Mediation Election Form (Form FM -2) which was included with the Notice of Default on Residential Mortgage received from the lender;
(2) A copy of the Loss Mitigation Application Form (Form FM -1LM) submitted to the lender pursuant to paragraph (a) of this subsection; and
(3) The mediation fee in the amount of fifty dollars ($50.00).
2708.3 The fee required pursuant to subsection 2708.2(b)(3) shall be in the form of a check or money order payable to the "District of Columbia Treasurer". No other form of payment will be accepted.
2708.4 Where there is more than one (1) borrower subject to the residential mortgage for which the Notice of Default on Residential Mortgage is issued, and at least one of the borrowers makes an election pursuant to subsection 2708.2 within thirty (30) days of the date of the Notice of Default on Residential Mortgage, the Mediation Administrator shall schedule a mediation which shall include each borrower subject to the residential mortgage for which the Notice of Default on Residential Mortgage is issued who makes a timely election pursuant to subsection 2708.2.
2708.5 A borrower that does not make a timely election pursuant to subsection 2708.2 after receiving a Notice of Default on Residential Mortgage may participate in mediation with respect to the residential mortgage for which the Notice of Default on Residential Mortgage is issued pursuant to subsection 2712.5(f) or subsection 2712.6.
2709 RECEIPT OF MEDIATION ELECTION FORM AND LOSS MITIGATION APPLICATION ON BEHALF OF LENDER
2709.1 The Mediation Administrator is authorized to receive on behalf of the lender which issues a Notice of Default on Residential Mortgage, the Mediation Election Form (Form FM-2) and Loss Mitigation Application (Form FM-1LM) submitted to the Mediation Administrator by a borrower who makes an election pursuant to subsection 2708.2 after receipt of a Notice of Default on Residential Mortgage.
2709.2 A copy of a Loss Mitigation Application (Form FM-1LM) filed with the Mediation Administrator in compliance with subsection 2708.2(b) shall constitute service upon the lender of the Loss Mitigation Application (Form FM-1LM) as required by section 539b(d)(1) of the Act.
2709.3 A copy of a Mediation Election Form (Form FM-2) filed with the Mediation Administrator in compliance with subsection 2708.2(b) shall constitute service upon the lender of the Mediation Election Form (Form FM-2) as required by notices issued by the Mediation Administrator section 539b(c) of the Act.
2709.4 The Mediation Administrator shall send, by electronic mail, to the lender, at the electronic mail address listed on Lender Foreclosure Mediation Agent Contact Form (Form FM-1AC) filed pursuant subsection 2703.9 the Mediation Election Form (Form FM-2) and Loss Mitigation Application (Form FM-1LM) received from a borrower pursuant to subsection 2708.2(b) within two (2) business days of receipt of those documents from the borrower.
2710 MEDIATION SCHEDULING
2710.1 Upon the timely filing of the Mediation Election Form by the borrower(s), the Mediation Administrator shall schedule mediation between the borrower(s) and the lender not later than forty-five (45) days after the date of mailing the Notice of Default on Residential Mortgage to the borrower(s).
2710.2 Mediation shall be completed within ninety (90) days of the mailing of the Notice of Default on Residential Mortgage unless extended pursuant to subsection 2710.15.
2710.3 The Mediation Administrator may reschedule a scheduled mediation upon five (5) business days written notice to each mediation party if the Mediation Administrator determines that the rescheduling of the mediation is in the public interest. The Mediation Administrator shall consult with the mediation parties with respect to the new time for the rescheduled mediation.
2710.4 A mediation party who fails to attend, or send an authorized agent to a scheduled mediation without good cause shown in writing shall be deemed to have not acted in good faith with respect to the mediation.
2710.5 A mediation party, upon good cause shown in writing to the Mediation Administrator, may request the rescheduling of a mediation that has been scheduled by the Mediation Administrator.
2710.6 The Mediation Administrator shall approve or disapprove a request to reschedule a mediation pursuant to subsection 2710.5 within one (1) business day of the request of the mediation party and shall inform the mediation parties of the determination and, if the request is approved, the Mediation Administrator shall inform the mediation parties of the new time for the rescheduled mediation within two (2) business days of the approval of the request to reschedule the mediation. The Mediation Administrator shall consult with the mediation parties with respect to the new time for the rescheduled mediation.
2710.7 A mediation party may not request the rescheduling of a mediation that has been scheduled by the Mediation Administrator pursuant to subsection 2710.5 more than one (1) time without the consent of every other mediation party.
2710.8 A lender who fails to mediate in good faith with respect to mediation as determined in subsection 2713 shall be subject to a fine pursuant to section 2724 and the Mediation Administrator shall not issue a Mediation Certificate until the lender is subsequently determined to have participated in the mediation in good faith.
2710.9 The Mediation Administrator may terminate mediation and cancel a Notice of Default on Residential Mortgage filed by a lender who fails to participate in the mediation in good faith with respect to mediation for a period in excess of thirty (30) days.
2710.10 The Mediation Administrator shall issue to the mediation parties a notice of any termination or cancellation of a Notice of Default on Residential Mortgage pursuant to subsection 2710.9 within ten (10) days of the termination or cancellation of a Notice of Default on Residential Mortgage.
2710.11 Any applicable time period set forth in the Act or in this chapter shall be tolled during the period in which a lender fails to act in good faith with respect to mediation.
2710.12 Each mediation party shall bring all documentation and information required by section 2714 to all scheduled mediation sessions.
2710.13 A mediation party that fails, without good cause shown to the mediator, to bring any required documentation or information required by section 2714 shall be deemed to have not acted in good faith with respect to the mediation.
2710.14 Upon a showing of good cause by a mediation party or when in the public interest, a mediator may reschedule a mediation within twenty (20) days to enable a mediation party to produce required documentation or information to the other mediation party or the mediator.
2710.15 The mediation parties may agree to extend mediation for an additional thirty (30) days beyond the ninety (90) day period provided by section 539b(e)(5) of the Act by mutual consent by executing a Mediation Extension Form (FormFM-3EX), as prescribed by the Commissioner and available on the Commissioner's website at http://disb.dc.gov, and shall include all information specified in Form FM-1AC.
2710.16 A borrower who fails to act in good faith with respect to mediation pursuant to subsection 2710.12 shall not be entitled to continue to participate in the mediation.
2710.17 A mediation may be scheduled by telephone, mail, email, or facsimile.
2710.18 A mediation scheduled by telephone shall be supplemented by notice of the mediation by mail, email, or facsimile, as available for a mediation party.
2710.19 Notice of a scheduled mediation shall be provided to all borrowers to whom the Notice of Default on Residential Mortgage was mailed.
2710.20 A mediation referred to a mediator by the Mediation Administrator pursuant to subsection 2717.3(a) shall be scheduled within fifteen (15) days of the referral and shall be completed within thirty (30) days of the referral.
2710.21 A mediation shall not exceed two (2) three (3) hour mediation sessions, which may be scheduled concurrently.
2711 CANCELLATION OF MEDIATION
2711.1 A mediation party may cancel mediation at any time after a borrower elects to participate in mediation pursuant to section 2708 by filing a Cancellation of Mediation Form (Form FM-X1) prescribed by the Commissioner and available on the Commissioner's website at http://disb.dc.gov.
2711.2 In the event a mediation that involves more than one (1) borrower, all borrowers must file a Cancellation of Mediation Form (Form FM-X1) in order for a borrower to cancel the mediation.
2711.3 Upon the cancellation of mediation by all borrower(s) who timely elected to mediate pursuant to section 2708, the Mediation Administrator shall cancel the mediation and issue a Mediation Certificate to the lender within ten (10) days of receipt of the Cancellation of Mediation Form.
2711.4 Upon the cancellation of mediation by a lender, the Mediation Administrator shall cancel the Notice of Default on Residential Mortgage filed by a lender and cancel the mediation.
2711.5 The Mediation Administrator shall send all mediation parties a copy of a Cancellation of Mediation Form filed by a lender along with notice that the mediation has been cancelled.
2712 ATTENDANCE AT MEDIATION
2712.1 Except as provided in subsection 2712.2, each mediation party shall attend each scheduled mediation or other meeting required by the mediator.
2712.2 A mediation party shall not be required to attend mediation or other meeting required by the mediator if the mediation party sends a representative on behalf of the mediation party, the representative meets the requirements of subsection 2712.3, and the mediation party, along with the representative, executes the Declaration of Representation and Authority Form (Form FM-AG) pursuant to subsection 2712.4.
2712.3 A representative of a mediation party shall:
(a) Have authority to:
(1) Address loss mitigation programs that may be available to the borrower;
(2) Renegotiate the terms of the residential mortgage, including a loan modification; and
(3) Negotiate any other options that may be available in lieu of foreclosure; or
(b) Have access at all times during the mediation to a person with the authority listed in paragraph (a) of this subsection.
2712.4 If a mediation party sends a representative to the mediation, the mediation party and the mediation party’s representative shall execute and provide to the other mediation party or mediation party representative and the mediator a Declaration of Representation and Authority attesting that the mediation party representative has the authority or access to the person with the authority required in subsection 2712.3 using the Declaration of Representation and Authority (Form FM-AG) prescribed by the Commissioner and available on the Commissioner's website at http://disb.dc.gov.
2712.5 The following persons may participate in any mediation under this chapter:
(a) A borrower(s);
(b) The lender;
(c) The lender's servicing agent;
(d) The representative(s) for the lender;
(e) The representative(s) for the borrower;
(f) A borrower who received the Notice of Default on Residential Mortgage but did not make a timely election pursuant to subsection 2708.2 who is requested to participate by a borrower who is a mediation party; and
(g) If a borrower is deceased, a person who can produce a death certificate with respect to the deceased borrower and who has an ownership interest in the real property subject to the residential mortgage for the Notice of Default on Residential Mortgage was issued.
2712.6 The mediator may include in mediation or other meeting required by the mediator any other person the mediator determines would assist in the mediation unless there is a written objection by a mediation party or mediation party representative, as long as the objection is consistent with the mediation party’s or the mediation party’s representative’s obligation to participate in the mediation in good faith.
2712.7 The mediator shall not include in mediation or other meeting required by the mediator pursuant to subsection 2712.6 a person that is not directly related to the mediation or the mortgage subject to the Notice of Default on Residential Mortgage.
2712.8 At any time during the mediation process, the mediator may refer a borrower to a housing counseling agency for mortgage assistance provided that the mediation shall resume not later than fifteen (15) days after the referral.
2712.9 Any applicable time period set forth in the Act or in this chapter shall be tolled during the period of the referral in subsection 2712.8.
2713 OBLIGATION TO MEDIATE IN GOOD FAITH
2713.1 Each mediation party or authorized representative of a mediation party shall make a good faith effort to mediate all issues.
2713.2 A good faith effort to mediate requires the lender at mediation to:
(a) Evaluate the borrower(s)’s eligibility for alternatives to foreclosure, including reinstatement, loan modification, forbearance, short sale, deed in lieu of foreclosure, and, in considering a loan modification, evaluate the borrower(s)'s eligibility for each loan modification program available from the lender and under the Federal Deposit Insurance Corporation’s Loan Modification Program, using the calculations, assumptions, and forms established by the Federal Deposit Insurance Corporation Loan Modification Program and published in the Federal Deposit Insurance Corporation Loan Modification Program Guide, as set out on the Federal Deposit Insurance Corporation’s publicly accessible website;
(b) Offer the borrower a loan modification if the borrower(s) is eligible for the loan modification program pursuant to paragraph (a) of this subsection; and
(c) If the lender does not reach a settlement with the borrower(s) during a mediation, the lender shall demonstrate that the net present value of receiving payments pursuant to a modified mortgage loan is less than the anticipated net recovery following foreclosure.
2713.3 In the event a lender rejects a proposed settlement involving an alternative to foreclosure other than a loan modification that has a lower cost than foreclosure, the lender shall provide a written explanation for the rejection of the proposal.
2713.4 A mediation party fails to mediate in good faith if the party:
(a) Fails to provide information required in section 2714;
(b) Fails to attend a mediation or other meeting scheduled by the mediator as required by section 2712;
(c) Fails to make a good faith effort to mediate all issues as required by subsections 2713.1 through 2713.3;
(d) Fails to provide a written explanation as required by subsection 2713.3; or
(e) If a lender, fails to comply with section 2703.
2713.5 The determination that a mediation party has failed to mediate in good faith shall be made by the Mediation Administrator in accordance with these regulations.
2714 INFORMATION REQUIRED FOR MEDIATION
2714.1 The lender or its representative shall, at least five (5) business days prior to the first session of mediation scheduled by the Mediation Administrator, provide to the Mediation Administrator the following, if applicable to the residential mortgage:
(a) An itemization of the amounts needed to cure and payoff the mortgage;
(b) Payment history records with respect to the mortgage, including all fees and costs;
(c) The results of the lender’s loss mitigation analysis;
(d) A recorded copy of the mortgage, including the mortgage note or other agreement;
(e) A true copy of every assignment of the mortgage;
(f) The name of the holder of the note;
(g) The location of the note;
(h) Evidence that demonstrates that the lender has a right to foreclose on the residential mortgage with respect to each borrower;
(i) A copy of its documentation of its consideration of the options available in section 2713, including the data used in and the outcome of any calculation required by the Federal Deposit Insurance Corporation Loan Modification Program or other loss mitigation standards;
(j) A true copy of all pooling and servicing or other similar agreements regarding the residential mortgage; and
(k) Any document to substantiate any claim by the lender that the borrower is not eligible for a loss mitigation option available from the lender or to be presented during mediation.
2714.2 The lender shall bring to a scheduled mediation the documents required in subsection 2714.1 and any other information requested by the Mediation Administrator or mediator.
2714.3 A borrower shall bring to the mediation and make available to the mediator the following:
(a) The residential mortgage borrower’s most recent tax return, W-2, last two (2) pay stubs, or any other documentation of the borrower’s household income;
(b) Other information requested by the Mediation Administrator or mediator in advance of the mediation.
2714.4 A mediation party shall cooperate with the mediator to produce the information required by this section in a timely manner so as to permit the mediation process to function effectively.
2714.5 In the event that a mediation party does not cooperate with the mediator as required by this section, the Mediation Administrator:
(a) May determine that the mediation party is not participating in mediation in good faith; or
(b) Reschedule the mediation to enable the mediation party to obtain information required by this section.
2715 CONFIDENTIAL INFORMATION
2715.1 Except for financial information included on a Notice of Intention to Foreclose a Residential Mortgage (Form FM-5), any financial statement or information provided to the Mediation Administrator, mediator, or mediation parties during the course of mediation in accordance with this chapter shall be confidential and shall not be available for public inspection.
2715.2 Any financial statement or information obtained during mediation and designated as confidential pursuant to this section shall not be used for purposes other than mediation except if the information can be obtained from sources outside of the mediation.
2715.3 Information discussed in a mediation session shall not be used in any legal proceeding except for actions to enforce the Act or this chapter, or if the information can be obtained from sources outside of the mediation.
2715.4 A mediator cannot be sued or subpoenaed in any legal proceeding.
2716 SETTLEMENTS
2716.1 Any settlement agreement reached as a result of mediation shall be a permanent resolution of the default of the residential mortgage.
2716.2 Any settlement agreement reached as a result of mediation shall be reduced to writing and executed by the mediation parties within five (5) business days of the date of agreement by the mediation parties.
2717 MEDIATION REPORT
2717.1 Within five (5) days after the completion of a mediation, the mediator shall file a Mediation Report with the Mediation Administrator and the mediation parties in the form and providing the information specified in Mediation Report Form (Form FM-4) prescribed by the Commissioner and available on the Commissioner's website at http://disb.dc.gov.
2717.2 The Mediation Report required by this section shall contain all of the following items:
(a) The date on which the mediation was held, including the starting and finishing dates and times;
(b) The names and addresses of all persons attending, showing their role in the mediation and specifically identifying the representative of each party who had decision-making authority;
(c) A summary of any substitute arrangement made regarding attendance at the mediation;
(d) All calculations and other foreclosure avoidance tool calculations performed prior to or during the mediation and all information required in section 2714;
(e) The results of the mediation, stating whether full or partial settlement was reached and appending any agreement of the parties;
(f) A statement as to whether a mediation party or a representative of a mediation party failed to:
(1) Attend the mediation;
(2) Make a good faith effort to mediate; or
(3) Supply documentation, information, or data as required by section 2714; and
(g) If a settlement is not reached, a summary of the discussions of the mediation parties during the mediation.
2717.3 Unless a settlement agreement is executed between the mediation parties, the Mediation Administrator, after reviewing and considering a Mediation Report, shall within five (5) business days after receipt of the Mediation Report:
(a) Refer the matter to another mediator if there is a reasonable likelihood the mediation parties would be able to reach a settlement agreement, or issue a Mediation Certificate if the lender participated in the mediation in good faith; or
(b) If the lender did not participate in the mediation in good faith, assess any applicable penalty pursuant to the Act or this chapter against the lender, and terminate the mediation and Notice of Default on Residential Mortgage without issuing a Mediation Certificate.
2718 MEDIATION CERTIFICATE
2718.1 A Mediation Certificate issued pursuant to the Act shall expire one (1) year from the date of issue.
2718.2 A Mediation Certificate issued pursuant to the Act shall constitute conclusive proof that the mediation parties have completed mediation without reaching a settlement.
2719 APPLICATION FOR ORDER TO PERFORM DUE TO BREACH
2719.1 A borrower that alleges that the lender has breached a settlement agreement executed between the lender and the borrower may request the Mediation Administrator to issue an Order to Perform by filing an Application for Order to Perform Due to Breach (Form FM-10B) prescribed by the Commissioner and available on the Commissioner's website at http://disb.dc.gov.
2719.2 An Application for Order to Perform Due to Breach (Form FM-10B) shall be filed with the Mediation Administrator.
2719.3 An Application for Order to Perform Due to Breach (Form FM-10B) shall be mailed to the lender by the borrower.
2719.4 A lender who receives an Application for Order to Perform Due to Breach Form (FM-10B) alleging that the lender is in breach of a settlement agreement may challenge the allegation of the borrower that the lender breached the settlement agreement by filing an objection to the Application for Order to Perform Due to Breach Form FM-10L with the Mediation Administrator within five (5) days of the mailing of the Application for Order to Perform Due to Breach pursuant to this section.
2719.5 An objection filed pursuant to subsection 2719.4 shall set forth each basis for which the lender should not be found to have breached the settlement agreement and include all relevant facts.
2719.6 The Mediation Administrator may contact the lender or borrower(s) for information regarding an Application for Order to Perform Due to Breach filed pursuant to this section.
2720 APPLICATION FOR MEDIATION CERTIFICATE DUE TO BREACH
2720.1 A lender that alleges that the borrower has breached a settlement agreement executed between the lender and the borrower may apply for a Mediation Certificate by filing an Application for Mediation Certificate Due to Breach (Form FM-10L) prescribed by the Commissioner and available on the Commissioner's website at http://disb.dc.gov.
2720.2 An Application for Mediation Certificate Due to Breach (Form FM-10L) shall be filed with the Mediation Administrator.
2720.3 An Application for Mediation Certificate Due to Breach (Form FM-10L) shall be mailed to the borrower(s) by the lender.
2720.4 A borrower who receives an Application for Mediation Certificate Due to Breach (Form FM-10L) alleging that the borrower(s) is in breach of a settlement agreement may challenge the allegation of the lender that the borrower(s) breached the settlement agreement by filing an objection to the Application for Mediation Certificate Due to Breach (Form FM-10L) with the Mediation Administrator within five (5) days of the mailing of the Application for Mediation Certificate Due to Breach pursuant to this section.
2720.5 An objection filed pursuant to subsection 2720.4 shall set forth each basis for which the borrower(s) should not be found to have breached the settlement agreement and include all relevant facts.
2720.6 The Mediation Administrator may contact the borrower(s) or lender for information regarding an Application for Mediation Certificate Due to Breach filed pursuant to this section.
2721 NOTICE OF INTENTION TO FORECLOSE A RESIDENTIAL MORTGAGE FORM
2721.1 The authorized Notice of Intention to Foreclose a Residential Mortgage Form (Form FM-5) as set forth in section 2794 shall be used to comply with the requirements in Section 539(c) of the Act for a foreclosure sale pursuant to a residential mortgage. Issuance of the Notice of Intention to Foreclose a Residential Mortgage Form shall comply with section 2728.
2722 MEDIATION ADMINISTRATOR
2722.1 The Commissioner shall designate an individual to serve as the Mediation Administrator through the issuance of a Department Order.
2722.2 The Commissioner shall publish on the Department’s website any Order issued pursuant to subsection 2722.1.
2723 QUALIFICATION, APPOINTMENT, TRAINING, AND COMPENSATION OF MEDIATORS
2723.1 The following persons shall be qualified to act as a mediator under this chapter:
(a) An Administrative Law Judge or attorney employed by the Office of Administrative Hearings, authorized by the Commissioner to provide mediation services under the Act and this chapter, and who has completed a foreclosure mediation training program approved by the Commissioner; and
(b) An individual who is licensed to practice law in the District of Columbia and who has completed a foreclosure mediation training program approved by the Commissioner.
2723.2 Through the issuance of a Department Order, the Commissioner may appoint an individual qualified under subsection 2723.1(a) pursuant to an effective Memorandum of Understanding between the Department and the Office of Administrative Hearings.
2723.3 Through the issuance of a Department Order, the Commissioner may appoint an individual qualified under subsection 2723.1(b) pursuant to a valid contract between the Department and the mediator or the mediator’s employer.
2723.4 An Order issued pursuant to subsection 2723.2 or subsection 2723.3 shall be posted on the Department’s website after the issuance of the Order by the Commissioner.
2723.5 The Commissioner, by Department Order, shall designate approved foreclosure mediation training programs required pursuant to subsection 2723.1 and the Order shall provide a description of the program, including the requirement for the program and the requirement for obtaining a certification under the program.
2723.6 Compensation for mediators appointed pursuant to subsection 2723.2 shall be provided by the Office of Administrative Hearings.
2723.7 Compensation for mediators appointed pursuant to subsection 2723.3 shall be provided pursuant to the contract.
2724 VIOLATIONS
2724.1 A lender that initiates a foreclosure through the power of sale provision of a residential mortgage in violation of the Act or this chapter shall be deemed to have failed to participate in the mediation in good faith.
2724.2 Any cost incurred by a lender in a foreclosure through the power of sale provision of a residential mortgage in violation of the Act or this chapter shall not be assessed to the borrower(s).
2724.3 A lender that fails to attend a mediation shall be subject to a penalty assessed by the Commissioner in the amount of five hundred dollars ($500) for each mediation session that the lender fails to attend.
2724.4 A lender that fails to bring to a mediation any document required by the Act, this chapter, the Mediation Administrator, or mediator shall be subject to a penalty assessed by the Commissioner in the amount of five hundred dollars ($500) per day until the lender provides the required document to the Mediation Administrator.
2724.5 A lender that fails to mediate in good faith shall be subject to a penalty assessed by the Commissioner in the amount of five hundred dollars ($500) for each day that the lender fails to mediate in good faith.
2724.6 A lender that breaches a settlement agreement pursuant to section 539b(e)(4)(a)(i) of the Act shall be subject to a penalty assessed by the Commissioner in the amount of one thousand dollars ($1,000), and shall be required to perform the terms of the settlement agreement.
2725 FORECLOSURE OF A SECURITY INTEREST OTHER THAN A RESIDENTIAL MORTGAGE
2725.1 A lender or trustee that initiates a foreclosure pursuant to a security interest other than a residential mortgage shall file and record with the District of Columbia Office of the Recorder of Deeds an Affidavit of Non-Residential Mortgage Foreclosure prior to, or contemporaneously with, a Notice of Foreclosure pursuant to section 539(c) of the Act.
2725.2 The Affidavit of Non-Residential Mortgage Foreclosure shall be in the form contained in the Affidavit of Non-Residential Mortgage Foreclosure (Form FM-6) prescribed by the Commissioner and available on the Commissioner's website at http://disb.dc.gov., and shall include all information required in Form FM-6.
2726 PRINCIPAL PLACE OF ABODE AND IMMEDIATE FAMILY MEMBER
2726.1 The principal place of abode of an individual is the place where an individual lives unless temporarily absent due to special circumstances. A temporary absence from the household due to special circumstances, such as illness, education, business, vacation, or military service, will not change an individual’s principal place of abode.
2726.2 An immediate family member of the borrower shall mean a parent; sibling; child by blood, adoption, or marriage; spouse; grandparent; or grandchild of the borrower.
2727 NOTICE OF INTENTION TO FORECLOSE A RESIDENTIAL LOAN
2727.1 The holder of a note secured by a deed of trust, mortgage, or security instrument (hereinafter, holder), or the agent of any such holder, shall at least thirty (30) days in advance of any sale of the real property encumbered by the deed of trust, mortgage, or security instrument under a power of sale provision contained therein, send to the borrower(s), of the real property encumbered by the deed of trust, mortgage, or security instrument, by first-class certified mail, postage prepaid, return receipt requested, and by first-class mail, a Notice of Intention to Foreclose a Residential Mortgage at his or her last known address.
2727.2 The lender shall provide the following information concerning the sale on the Notice of Intention to Foreclose a Residential Mortgage (Form FM-5):
(a) The name and address of the borrower(s) of the property, and his or her telephone number, if known;
(b) The identification of the property by address;
(c) The lot and square number or the parcel number of the property;
(d) The date on which the security instrument was recorded in the land records of the District of Columbia at the Recorder of Deeds, and the security instrument number;
(e) The name, address, and telephone number of the maker of the note secured by the security instrument;
(f) A description of the property;
(g) The name, address, and telephone number of the holder of the note;
(h) The name, address, and telephone number of the person to call if the borrower wishes to stop foreclosure;
(i) The balance owed on the note, minimum amount required to cure the default obligation, total amount of fees and costs required to cure the default obligation, and an estimate of other fees or costs reasonably expected to be incurred through the date to cure the default;
(j) The time, date and location of the sale of the real property; and
(k) Provision for a notarized certification by the note holder or his or her agent that the original of the Notice of Intention to Foreclose a Residential Loan Mortgage (Form FM-5) has been sent to the borrower by first-class certified mail, return receipt requested, and by first-class mail, and that the note holder understands that no foreclosure sale may take place until at least thirty (30) days after a copy of the notice has been received by the Mediation Administrator.
2727.3 Any Notice of Intention to Foreclose a Residential Mortgage (Form FM-5) filed pursuant to the Act or this chapter shall be subject to the provisions set forth in 9 DCMR § 3100.3 – 3100.10 for a Notice of Intention to Foreclose a Residential Loan Mortgage (Form FM-5).
2728 SPECIAL RULES FOR DEFAULT BY BORROWER OF A COOPERATIVE UNIT
2728.1 The Mediation Administrator is authorized to waive any requirements, other than the requirement to mediate in good faith, set forth in this chapter where default or foreclosure of the loan to the borrower of a cooperative unit makes such requirements inapplicable due to the fact ownership in a housing cooperative association is not real property.
2728.2 In the event that the Mediation Administrator makes a waiver pursuant to subsection 2728.1, the Mediation Administrator is authorized to impose substitute requirements to achieve the purposes of the Act and this chapter.
2791 NOTICE OF DEFAULT ON RESIDENTIAL MORTGAGE (FORM FM-1)
2791.1 A Notice of Default on Residential Mortgage (Form FM-1) issued pursuant to this chapter shall be in the following form, and provide the information requested therein:
District of Columbia Notice of Default on Residential Mortgage – Form FM-1
Dear [1]:
According to our records, you are behind on your mortgage and owe the following amounts on the property located at [2]:
Month
Regular payment [3]_
Principal and interest [3]_
Interest only [3]_
Late fees
Escrow
(taxes and insurance)
Other:
_____[4]_______
Total
Grand Total
Please pay $[5] by [6] to bring your loan current. If you do not pay this amount by this date, your loan could go into default and you could later lose your home at a foreclosure sale.
If you are unable to make the above payment, you may:
Choose to participate in mediation through a program available from the District of Columbia government to see if you can qualify for a loan modification or other alternative to avoid foreclosure. Mediation is a face-to-face meeting between you and your lender, where you try to come to an agreement with the help of a neutral third-party mediator provided by the District of Columbia government. If you choose mediation, a foreclosure cannot be commenced until the mediation is concluded.
NOTICE: If you choose to mediate, you MUST take the following actions on or before [7]:
1. Complete and return the Mediation Election Form (Form FM-2), Loss Mitigation Application (Form FM-1LM), and a $50 fee payable to the “D.C. Treasurer” to the Mediation Administrator (Please keep a copy of all documents sent to the Mediation Administrator). Mail a copy of the Mediation Election Form (Form FM-2) and the Loss Mitigation Application (Form FM-1LM) to your lender. You should use the pre-addressed envelopes included with the Notice of Default on Residential Mortgage to mail the documents to the Mediation Administrator and to your lender.
NOTE: If you do not return the forms and fee by [8], you will lose your right to mediation and may lose your home through foreclosure.
2.You may also apply for one of [8]’s programs to assist borrowers who are behind in their mortgages. You will find information and applications for these programs enclosed.
You may choose both of these options at the same time. But, if you only choose to apply for one of the programs, you may not be able to choose mediation later on if we find that you do not qualify for [9]’s program. If you want to talk to someone at [10], about this, please call [11] at [12] or send a fax to [13].
NOTE: If you do not elect to participate in mediation or bring your loan current, [14] (your lender) may initiate the foreclosure of your mortgage and sell your home at a foreclosure sale.
Government of the District of Columbia
Department of Insurance, Securities and Banking
You are in danger of foreclosure.
Please read this Notice carefully to
learn how you may be able to prevent foreclosure.
If you are unable to bring your mortgage current, you can choose to get help from a mediator who works for the District of Columbia Department of Insurance, Securities and Banking.
To choose mediation, you must return the enclosed Mediation Election Form (Form – FM2), the Loss Mitigation Application (Form FM -1LM), and pay the $50 fee, by [9].
IMPORTANT: If you choose mediation, a foreclosure cannot be commenced until the mediation is concluded
What is Mediation?
Mediation is your chance to have a neutral third party help you and your lender try to find a solution to your mortgage problem.
Mediation is your only opportunity to sit down face-to-face with someone from [14] and a neutral third party to try to resolve your mortgage problem.
You can bring a representative with you to mediation if you want. You can have a representative attend for you, if you authorize that representative to negotiate a settlement of your mortgage problem for you.
The Mediation Administrator, a District of Columbia government employee, will contact you regarding the scheduling of your Mediation.
What are all of these papers?
You should have received the following documents with the Notice of Default on Residential Mortgage:
1. A Mediation Election Form (Form FM-2) which you can use to choose to go to mediation to help resolve your mortgage problem.
2. Two pre-addressed envelopes to use to choose the option to mediate. One should be addressed to the Mediation Administrator, and one should be addressed to your lender.
3. A document that describes special programs (loss mitigation programs) available from your lender for your mortgage loan when you are behind in your mortgage loan payments. The document should describe each available program and the eligibility requirements for each program.
4. A Loss Mitigation Application (Form FM-1LM) that should be used to apply for loss mitigation programs available from your lender. NOTE: the Loss Mitigation Application must be sent to the Mediation Administrator and the lender in order to choose to go to mediation. You may choose to do both mediation and apply for a loss mitigation program.
5. Borrower Assistance and Resource Information (Form FM -1BA) which provides useful information to assist you in obtaining assistance with your mortgage problems.
If you have not received these documents, or if you have misplaced any of the documents, please call the Mediation Administrator at (202) 727-8000.
Who can I call for help?
If you have any question about any of these documents, foreclosure, or mediation, you can contact the District of Columbia Department of Insurance, Securities and Banking
810 First Street, NE, Suite 701
Washington, DC 20002
(202) 727-8000
In addition, you should review the Borrower Assistance and Resource Information (Form FM-1BA), which provides resources where you may be able to obtain assistance with your mortgage problem and other housing issues.
Are there any deadlines for me to act?
If you want to choose mediation, you have until [15], to complete and return the Mediation Election Form (Form FM-2) and the Loss Mitigation Application (Form FM-1LM), along with a $50 fee payable to the “D.C. Treasurer”, to the Mediation Administrator. Additionally, you have to copy the Mediation Election Form (Form FM-2) and the Loss Mitigation Application (Form FM-1LM) and mail it to your lender [16]. You should use the pre-addressed envelopes included with the Notice of Default on Residential Mortgage to send the documents to the Mediation Administrator and your lender.
If you do not return the Mediation Election Form and fee by [17], the Mediation Administrator will issue a Mediation Certificate that will permit [18] to foreclose on your property.
If the Mediation Administrator issues a Mediation Certificate, [18] will then be able to foreclose on your property after giving a Notice of Intention to Foreclose a Residential Mortgage (Form FM-5] at least thirty (30) days before any foreclosure sale.
A lender in the District of Columbia does not have to take you to court to foreclose on your property. A sale can take place thirty (30) days after the issuance of a Notice of Intention to Foreclose a Residential Mortgage (Form FM-5).
FAQ
If I return the form to [18] to apply for one of their programs, should I still return the mediation form?
YES. You must return the Mediation Election Form if you want the help of a neutral third-party to help resolve your mortgage problems. Applying directly to [18] for help does not stop the clock on your deadline by which you must apply for mediation with the Mediation Administrator.
Information for Notice of Default on Residential Mortgage (Form FM-1LM)
INSTRUCTIONS: The following information shall be included in the Notice of Default on Residential Mortgage to be sent to a borrower. The information listed below shall be provided in the Notice of Default on Residential Mortgage in place of the corresponding numbered bracket spaces.
- Insert Name and address of Borrower.
- Insert the complete legal address, including lot and square number, of the real property subject to the Notice of Default on Residential Mortgage.
- Check if applicable
- Other items of non-payment or fees. For each fee, provide a description and amount. Attach additional sheets as necessary.
- Insert amount to cure default
- Insert date to cure default
- Insert Date which is the thirtieth (30th) day after the day of the Mailing of Notice of Default on Residential Mortgage, not including the date of the Mailing of Notice of Default on Residential Mortgage.
- Insert Date which is the thirtieth (30th) day after the day of the Mailing of Notice of Default on Residential Mortgage, not including the date of the Mailing of Notice of Default on Residential Mortgage.
- Insert Name of Lender
- Insert Name of Lender
- Insert Name of Lender, or the Agent for the Lender who can discuss the Notice of Default on Residential Mortgage, the Lender’s Loss Mitigation programs, and the Foreclosure Mediation Program.
- Insert the telephone number for the Lender, or the Agent for the Lender who can discuss the Notice of Default on Residential Mortgage, the Lender’s Loss Mitigation programs, and the Foreclosure Mediation Program.
- Insert the facsimile number for the Lender, or the Agent for the Lender who can discuss the Notice of Default on Residential Mortgage, the Lender’s Loss Mitigation programs, and the Foreclosure Mediation Program.
- Insert Name of Lender
- Insert Date which is the thirtieth (30th) day after the day of the Mailing of Notice of Default on Residential Mortgage, not including the date of the Mailing of Notice of Default on Residential Mortgage.
- Insert Date which is the thirtieth (30th) day after the day of the Mailing of Notice of Default on Residential Mortgage, not including the date of the Mailing of Notice of Default on Residential Mortgage.
- Insert Date which is the thirtieth (30th) day after the day of the Mailing of Notice of Default on Residential Mortgage, not including the date of the Mailing of Notice of Default on Residential Mortgage.
- Insert Name of Lender
2792 MEDIATION ELECTION FORM (FORM FM -2)
2792.1 A Mediation Election Form (Form FM -2) issued pursuant to this chapter shall be in the following form, and provide the information requested therein:
Government of the District of Columbia
Department of Insurance, Securities and Banking
District of Columbia Mediation Election Form – Form FM-2
Do you want a D.C. Government mediator to help you try to resolve your problems with your mortgage?
If you do, you must return the two enclosed envelopes by [1].
- You should send the first envelope, addressed to the Department of Insurance, Securities and Banking (DISB) by [1]. You will need to add the appropriate postage. That envelope should include the following three (3) items:
- A completed Mediation Election Form (Form FM-2).
- A completed Loss Mitigation Application (Form FM -1LM).
- A $50 fee [check or money order] payable to the “D.C. Treasurer”. Please do not send cash. This is the only fee that you will have to pay to participate in the mediation.
- You should send the second envelope, addressed to your [2] by [1]. You will need to add the appropriate postage. That envelope should include the following two (2) items:
- A copy of the completed Mediation Election Form (Form FM-2).
- A copy of the completed Loss Mitigation Application (Form FM -1LM).
NOTE: Do not include any payment in this envelope.
If you do not mail both of these envelopes by [1], with the items listed above, [2] will be able to start the foreclosure process against your home. Your home can then be sold after [2] gives you a thirty-day notice. A lender in the District of Columbia does not have to take you to court to foreclose on your property.
PLEASE FILL OUT INFORMATION BELOW TO CHOOSE MEDIATION
_____ Yes, I would like to participate in mediation.
Do you have any Questions or Need Assistance?
If you have any questions, or need any help understanding or completing this Mediation Election Form (Form FM-2) and Loss Mitigation Application (Form FM -1LM), please contact:
DC Department of Insurance, Securities and Banking
810 First Street, NE, Suite 701
Washington, DC 20002
(202) 727-8000
________________________________________
Sign here:
________________________________________
Name (Please print):
________________________________________
Address:
________________________________________
________________________________________
Phone and Email:
________________________________________
Information for Mediation Election Form (Form FM-2)
INSTRUCTIONS: The following information shall be included in the Mediation Election Form to be sent to a borrower. The information listed below shall be provided in the Mediation Election Form in place of the corresponding numbered bracket spaces.
1. Insert Date which is the thirtieth (30th) day after the day of the Mailing of Notice of Default on Residential Mortgage, not including the date of the Mailing of Notice of Default on Residential Mortgage
2. Insert Name of Lender
2793 LOSS MITIGATION APPLICATION (FORM FM -1LM)
2793.1 A Loss Mitigation Application (Form FM -1LM) issued pursuant to this chapter shall be in the following form, and provide the information requested therein:
LOSS MITIGATION APPLICATION
ACKNOWLEDGMENT AND AGREEMENT
In making this request for consideration under your loss mitigation program, I hereby certify under penalty of perjury:
1. That all of the information in this document is truthful and the event(s) identified on page 1 is/are the reason that I need to request a modification of the terms of my mortgage loan, short sale or deed-in-lieu of foreclosure.
2. I understand that the Servicer, , or its agents may investigate the accuracy of my statements and may require me to provide supporting documentation. I also understand that knowingly submitting false information may violate the law.
3. I understand the Servicer will obtain a current credit report on all borrowers obligated on the Note.
4. I understand that if I have intentionally defaulted on my existing mortgage, engaged in fraud or misrepresented any fact(s) in connection with this document, the Servicer may cancel any loss mitigation agreement and may pursue foreclosure on my home.
5. That my Property is owner-occupied or occupied by a member of the borrower’s immediate family;
6. I am willing to provide all requested documents and to respond to all Servicer questions in a timely manner.
7. I understand that the Servicer will use the information in this document to evaluate my eligibility for a loan modification or short sale or deed-in-lieu of foreclosure, but the Servicer is not obligated to offer me assistance based solely on the statements in this document.
8. I understand that the Servicer will collect and record personal information, including, but not limited to, my name, address, telephone number, social security number, credit score, income, payment history, government monitoring information, and information about account balances and activity. I understand and consent to the disclosure of my personal information and the terms of any loss mitigation agreement to any third party that needs this information to process this application, including but not limited to: any investor, insurer, guarantor or servicer that owns, insures, guarantees or services my first lien or subordinate liens (if applicable) mortgage loan(s); any companies that perform support services in conjunction with my mortgage; any HUD-certified housing counselor; and government regulators.
_____________
[[46]Borrower Signature Date
Instructions for Completing Loss Mitigation Application (Form FM -1LM)
The numbers for each item below correspond to the same numbers on the Loss Mitigation Application.
1. Your loan number is the number on your mortgage loan statement.
2. Your loan Servicer is the financial institution that collects your monthly payment.
3. The Borrower section must include information on the person whose name is on the “Note” for the mortgage loan, or the person who holds record title, of the real property.
4. The co-borrower is a second person on the note for the mortgage loan. If you do not have a co-borrower, do not complete the questions for the co-borrower.
5. Please check all boxes that apply.
6. Please provide a mailing address and the residential “Property” address if different. The Property address should correspond to the mortgage for which you are submitting a Loss Mitigation Application.
7. Please indicated whether the property is listed for sale, and if it is listed for sale, please provide the additional information requested.
8. Please indicate whether you have contacted a housing-counseling agency, and if you have contacted a housing-counseling agency, please provide the additional information requested.
9. Please indicate who pays the real estate taxes for the property (“HOA” means Homeowner’s Association).
10. Please indicate who pays for hazard property insurance for the property.
11. Please indicate whether you have filed for bankruptcy. If so, please provide chapter under which you filed and the date you officially filed for bankruptcy. Also indicate if you have received a discharge in bankruptcy and the bankruptcy number.
12. Please provide the required information for any additional liens you may have on the property. Additional liens include second (or third) mortgages and home equity lines of credit.
13. Please select as many hardships as apply to your situation. You can use the extra lines to explain your hardship, though extensive explanations could delay the processing of your application.
Income: You must include with this application documentation of your income and provide your most recent tax return, W-2, last two pay stubs, and any other evidence of income such as benefit statements, bank statements, alimony or child support documents.
14. Indicate the number of people in your household who contribute to the total income.
15. Monthly gross wages are what you receive before taxes. This amount should be listed on a current pay stub. Please use your most current pay stub for this amount.
16. Income that you receive for any overtime work.
17. If you receive child support, alimony, or separation maintenance income, you are not required by law to report it. You should only include this amount if you would like it to be included in the income calculation.
18. SSDI means Social Security/Disability Income.
19. Provide your monthly income you receive from pensions, annuities, or retirement plans.
20. Provide your monthly income you receive from Tips, commissions, bonus and self-employed income
21. Only include rental income if used as part of your overall income.
22. You must have at least nine months of unemployment income to report on this form. Report the amount indicated on your benefits letter. You must provide a copy of your benefits letter as documentation of this income.
23. Provide your monthly income you receive from public or welfare benefits.
24. Add all other income and report the sum in the box marked “Total Gross Income”.
25. Add all amounts in income column and report sum.
Debts and Expenses:
26. This is the amount of your first lien on your home. This amount can be found on your statement for your first mortgage.
27. This is the amount of your second lien on your home. If applicable, this amount can be found on the statement for your second mortgage or home equity lines of credit.
28. This refers only to homeowner’s insurance and should be reported only if you pay this yourself.
29. Only report property taxes if you pay them yourself.
30. Add all credit cards and installment payments and report sum here.
31. If you are responsible for paying child support or alimony, you must report the amount here.
32. Report amount if your total rental income does not cover your total rental expenses.
33. Report the monthly amount of HOA/Condo / Coop /Property Maintenance fees you pay. “HOA” means Homeowner’s Association. A Condominium means the ownership of a single dwelling unit in a horizontal property regime. A cooperative housing association means an association, whether incorporated or unincorporated, organized for the purpose of owning and operating residential real property, the shareholders or members of which, by reason of their ownership of a stock or membership certificate, a proprietary lease or other evidence of membership, are entitled to occupy a single dwelling unit pursuant to the terms of a proprietary lease or occupancy agreement.
34. Include car payments only if you are the owner of the vehicle.
35. Include any other pertinent household expenses.
36. Add all amounts in debt and expense column and report sum.
Assets:
37. Report amounts for all accounts, if applicable.
38. Report amounts for all CDs you may have. “CDs” means certificates of deposit.
39. Report amounts for stocks or bonds you own.
40. Report the amount of cash you have.41. Report the estimated value for all other real property you own.
42. Report any other assets other than the value of life insurance or retirement plans, including 401K, pension funds, IRAs, Keogh plans, etc.)
43. Add all amounts in assets column and report sum.
Please be sure to read the entire Loss Mitigation Application Acknowledgement and Agreement before signing. Please be sure to complete the entire application. Any incomplete information may increase the time to process the application.
You are encouraged to contact a District of Columbia, HUD-Certified Housing Counseling Agent for advice and guidance regarding your situation. A list of Housing Counseling Agencies is included on the Borrower Assistance and Resource Information (Form FM-1BA).
If you have any questions about this document, foreclosure, or mediation, you can contact the
District of Columbia Department of Insurance, Securities and Banking
810 First Street, NE, Suite 701
Washington, DC 20002
(202) 727-8000
2794 NOTICE OF INTENTION TO FORECLOSE A RESIDENTIAL MORTGAGE (FORM FM-5)
2794.1 A Notice of Intention to Foreclose a Residential Mortgage (Form FM-5) issued pursuant to this chapter shall be in the following form, and provide the information requested therein:
.
2799 DEFINITIONS
2799.1 When used in this chapter, the words and phrases shall have the meanings ascribed:
Act – Saving D.C. Homes from Foreclosure Congressional Review Emergency Amendment Act of 2011, effective February 11, 2011 (D.C. Act 19-008; 58 DCR 1418) (“Act”), and any similar succeeding legislation.
Borrower- a residential mortgage borrower and, if different from the residential mortgage borrower, the person who holds record title.
Commissioner - Commissioner of the Department of Insurance, Securities and Banking.
Condominium - a single dwelling unit in a horizontal property regime.
Cooperative unit – a single dwelling unit in residential real property owned by a housing cooperative association and occupied by a member of the association which, by reason of ownership of a stock or membership certificate, a proprietary lease or other evidence of membership in the housing cooperative association.
Date of mailing - The date when a document is delivered to the United States Postal Service for mailing.
Days – Calendar days unless otherwise provided.
Department - Department of Insurance, Securities and Banking.
District - District of Columbia.
Federal Deposit Insurance Corporation Loan Modification Program – The IndyMac Loan Modification Program established by the Federal Deposit Insurance Corporation.
Lender - a residential mortgage lender or trustee.
Mediation party - A borrower or a lender with respect to a residential mortgage that is subject to mediation pursuant to the Act.
Mortgage - a lien instrument, including a mortgage or deed of trust, with at least two (2) parties, in which the borrower grants a lien on residential real property to the lender as security for the repayment of a note or loan.
Residential mortgage - a loan secured by a deed of trust or mortgage, used to acquire or refinance real property which is improved by four (4) or fewer single family dwellings, including condominium or cooperative units, at least one (1) of which is the principal place of abode of the debtor or his immediate family. This term includes a security interest established in connection with the financing of a housing cooperative unit.
Persons desiring to comment on these proposed rules should submit comments in writing to Stephen Taylor, General Counsel, Department of Insurance, Securities, and Banking, 810 First Street, NE, Suite 701, Washington, DC 20002. Comments must be received not later than ten (10) days after the date of publication of this notice in the D.C. Register. Copies of the proposed rules may be obtained from the Department at the address above.
