Before enforcing foreclosure evictions, one compassionate Sheriff in Pennsylvania plans to invite homeowners to meet with mortgage lenders and financial counselors. By doing so, he hopes to stop foreclosures through proactive solutions.

Allegheny County Sheriff William Mullen, whose jurisdiction includes Pittsburgh, has decided to take the law into his own hands. In an active effort to help homeowners, he wants to send deputies to post "reconciliation notices" before they serve eviction notices. This can effectively bring lenders and borrowers together in the hope that they'll find a way to avoid foreclosure.

Foreclosure pain

Some 250,000 Americans are now entering some stage of foreclosure each month, but lenders seem to be doing very little to stem this tide of trouble. The pace of efforts to assist distressed borrowers by reworking their loans to more manageable ones is slowing down. Despite industry promises and the urging of officials in Washington, the Associated Press reports that approximately 169,000 borrowers received some form of loan workout in May, down from 177,000 a month earlier. During the same period, the volume of foreclosures escalated.

A heart of gold

Getting homeowners to talk to lenders and come up with win-win solutions for both parties may be doable and realistic, and could result in some very positive outcomes. At least that's what Sheriff Mullen believes. He plans to send deputies to deliver reconciliation notices to homeowners whose mortgages have entered the first stages of foreclosure. Mullen says he knows what those families are going through because, years ago, his sister had cancer and couldn't support herself. As a result she almost lost her home.

Reconciliation hearings, Mullen explains, would give homeowners the chance to meet with lawyers, lenders, and a hearing officer, who would act as a referee or mediator. Those involved would try to agree on a reasonable mortgage rate that the delinquent borrower could manage to repay. He recently proposed the arrangement to Allegheny County Judge Joseph James, and plans seem to be moving forward to get the judge's approval and the support of the courts.

Here comes the judge

Back in 1983, a judge ordered a halt to mortgage foreclosures in Allegheny County in an effort to keep unemployed steelworkers from losing their homes. Reconciliation would not impose a moratorium on foreclosures, but it would probably help many homeowners keep their homes by forcing lenders to follow through on promises to help borrowers rework their troublesome loans.

"The hardest thing to do, and what everybody's complaining about, is getting the lenders to the table to meet with the borrowers," Sheriff Mullen said. "And Judge James can order that."

While Sheriff Mullen said he must continue to carry out court-ordered foreclosures, his reconciliation plan was praised by local officials and consumer advocacy groups. Perhaps the plan should be adopted throughout the entire country to make lenders stop procrastinating and finally do what they already vowed to do for beleaguered customers.

Published on July 29, 2008