It’s amazing how people come up with highly technical names for programs. Sometimes the most successful programs have the hardest to understand names. This is true for Philadelphia’s Residential Mortgage Foreclosure Diversion Pilot Program.

What is this program? Simply it is a program which helps people in Philadelphia who are facing foreclosure save their homes.

What is so great about the program? Its success rate. The program commenced in May of 2008. Mortgage modifications started to be made in June of 2008. At the end of 2008 78% of the people who had their mortgages modified through the program remained in their homes.

Why is this so great? The 78% success rate is the highest in the United States. At the end of 2008 statistics came out for the United States as a whole. Those revealed that in over 50% of the cases where mortgages were modified during the first quarter of 2008 the people fell behind on their mortgages within 6 months and were facing foreclosure again. So the program in Philadelphia is bucking the national trend.

The people in Philadelphia have developed an innovative and effective program for preventing foreclosure. Mortgage companies are required to meet with the people facing foreclosure. At these meetings they are required to negotiate a mutually agreeable solution to the foreclosure whenever possible.

Why is the program so successful? How did they get to the 78% success rate?

First, it is a mandatory program. Both the mortgage companies and the people facing foreclosure have to participate.

Second, it uses a very effective community outreach.

Third, it is easy for people facing foreclosure to participate in. They get the help they need.

Fourth, housing counselors work with the people facing foreclosure.

Fifth, there is a mediation process overseen by the courts.

All of these have come together to make this program far more successful than any other program helping people facing foreclosure save their homes. It is worthwhile to see how this program was put together. Can it become a model for other cities and states?

In Part 2 we will take a closer look at how this program was developed and why it is so successful.

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