District of Columbia Issues Guidance on Foreclosure Law Compliance

On November 29, the District of Columbia Department of Insurance, Securities and Banking (DISB) announced it had issued a November 24 bulletin informing licensed residential mortgage lenders and mortgage borrowers of the enactment of a new emergency law requiring mortgage lenders to go through six months of mediation with a homeowner before proceeding with a foreclosure. The law, titled the Saving D.C. Homes from Foreclosure Emergency Amendment Act of 2010, requires lenders to send homeowners a form to opt in or out of mediation when the homeowners receive foreclosure notices from the lenders. Borrowers who opt in will enter mediation with their lender and have 90 days, in addition to the 30 days they had to decide whether to opt in or out, to reach a settlement. Mediation will be guided by foreclosure mediators, and the program will be administered by DISB. The law became effective immediately upon the signature of Mayor Adrian Fenty on November 17 and will expire on February 15, 2011.