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February 7, 2012


Delaware law now mandates mediation for all residential mortgage foreclosures filed on or after January 19, 2012, for primary residences. A lender, before proceeding with a foreclosure, must give notice of available mediation to the homeowner and must participate in the mediation. The homeowner is not required to participate in the mediation, and if the homeowner does not participate in the mediation then the foreclosure may proceed without the mediation. The goal of the new law is to compel more homeowners and lenders to come to the table and agree on modified terms to try to avoid some of the foreclosures occurring in Delaware.

Effective as of January 13, 2012, the Superior Court of the State of Delaware promulgated an Administrative Directive, No. 2012-2, addressing procedures applicable for the Automatic Residential Mortgage Foreclosure Mediation Program (10 Del. C. § 5062C)(the “Act”). The Act mandates mediation for all foreclosure actions filed from January 19, 2012 through January 18, 2014 for owner-occupied one-to-four family primary residential properties, unless the mortgage is held by the seller of the property who does not hold more than 5 such mortgages (10 Del. C. §5062C). No judgment can be entered in a mortgage foreclosure action unless the plaintiff has filed a loss mitigation affidavit pursuant to 10 Del. C. § 5062(A).

The Administrative Directive requires, among other things, the foreclosure complaint and Notice to Lien Holders and Tenants to include a “Notice of Foreclosure Mediation” and list of HUD approved housing counseling agencies in Delaware. Plaintiffs are encouraged to schedule the mediation conference prior to filing the complaint. The initial mediation conference is to be scheduled for a date that is between 45 days and 75 days from the date of service of the complaint on the defendant. The Notice of Foreclosure Mediation which is to be served contemporaneously or subsequent to the complaint is to include (i) a Certificate of Participation, (ii) a Universal Intake Form and (iii) a Foreclosure Intervention Counseling Client’s Checklist. All of the mandatory forms are attached to the Administrative Directive.

The defendant has the responsibility to respond to the Notice of Foreclosure Mediation by completing the Certificate of Participation form and meeting with an approved Housing Representative within 30 days of filing of the complaint. If the defendant intends to participate, the defendant is to complete the Certificate of Participation accordingly and contact a Housing Representative from the Checklist provided. If the defendant indicates on the Certificate of Participation it is unwilling to participate, the mediation is cancelled. If the defendant fails to file a Certificate of Participation, the defendant may still attend the mediation, but an additional mediation may need to be conducted to permit the defendant to meet with a Housing Representative and complete the Certificate of Participation. Once the Certificate of Participation is filed indicating the defendant intends to participate, the plaintiff must file a $500 Mediation Fee with the Prothonotary.

Prior to the initial mediation, each of the defendant and the plaintiff are required to provide information to the mediator and each other in preparation for the mediation. The mediator may schedule a pre-mediation teleconference to discuss the documents. 
At the mediation, the parties are to address applicable loss mitigation programs or other resolutions that may avoid foreclosure. At the conclusion of each mediation conference, the mediator is to complete a Mediation Records reflecting the outcome of the conference. If the mediation is continuing, a Continuing Mediation Record is filed. Where the mediation is complete and the foreclosure action may proceed or where the foreclosure action is not suitable for mediation, a Final Mediation Record is to be filed. The mediator and parties to the mediation are all to sign the Mediation Record.

The mediator may recommend that the Court dismiss an action where the plaintiff fails to appear at two consecutive mediation conferences. If the defendant fails to appear, a Final Mediation Record will be filed and the plaintiff may proceed with the foreclosure unless the defendant contacts the program administrator and other conditions are satisfied.

For a copy of the Administrative Directive, go to

For help with your next real estate transaction, please contact The Kirsh Law Firm at either Newark, DE (302) 454-1510 or North East, MD (410) 287-1510. We look forward to the opportunity to be of service to you.

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