This one's for the judges: Order lenders to talk with borrowers, and you'll reduce litigation.

Here in Wisconsin (as I mentioned a while back) one county has adopted a mandatory mediation program for foreclosing lenders (and all creditors, in fact, suing debt0rs.) That county is Iowa County, and the judge with that kind of foresight is Judge William Dyke, who deserves to be lauded for being out in front of the problem.

Some other judges have embraced efforts on the part of firms like mine to get lenders to mediate foreclosure cases, while a number of them have refused to order foreclosing lenders to sit down and talk.

Mediation, a non-binding session where the two sides of a lawsuit meet with a trained professional to try to resolve the case short of trial, is routinely used in nearly every single civil case; I've had clients ordered to mediate civil cases even where we didn't think there was any chance of settling. Foreclosures, though, have traditionally been treated as a different breed of lawsuit, and judges have not routinely ordered mediation or other alternative dispute resolution, instead letting foreclosing lenders proceed without even attempting to force a settlement.

Now, though, thanks to Judge Dyke and others like him, and firms like ours, mediation is becoming more and more common in foreclosure cases -- and it's helping. Nevada saw two months of consecutive reductions in foreclosure filings, reductions of 26% and 33%, -- so there were 1/4 to 1/3 fewer foreclosures just three months after Nevada instituted a mandatory mediation program.

Not all states have mandatory mediation programs for foreclosures yet, and it makes you wonder, why not? Courts are constantly talking about the backlog of cases and the need to resolve cases short of litigation, and mandatory, up front mediation (with a requirement that the lender attend in person) has been proven to reduce foreclosure filings and therefore reduce litigation -- and the end result of that is that more people are staying in their houses for longer.

So if you're living in Wisconsin and are in foreclosure, take advantage of either the mandatory Iowa County foreclosure mediation; and if you're not in Iowa County, ask your lawyer (you do have a lawyer, right? Why wouldn't you hire a lawyer when your house is at stake?) to demand mediation anyway.