Is court-driven mediation the answer to the foreclosure fiasco? It's an idea drawing more attention at a time when credible solutions are unfortunately in short supply. Sen. Sheldon Whitehouse of Rhode Island, the chair of the Subcommittee on Administrative Oversight and the Courts, has introduced what would essentially create a bankruptcy court-driven mediation process.

Bankruptcy court mediation programs currently are active in Rhode Island, New York, Florida and Vermont, MarketWatch notes. The bill would expand it across the nation.

At this point, you would have to assume the bill faces a long road. But the concept is certainly worth discussion.

While the notion of granting bankruptcy court judges the ability to modify mortgage terms--so-called cramdowns--with the idea of keeping more people in their homes has been discussed--and rejected. This might represent a middle ground. The judges will not be able to adjust terms, but would be able to bring both sides together and help wrangle a deal.

Mortgage mediation has plenty of fans. Currently, given the backlog and the dearth of other solutions, it may be worth considering. There is no reason why states can't launch something on their own. To some, it would be a shame to not find a role for bankruptscy courts.

For more:
- here's the article

Related Articles:
Is mediation the answer to the foreclosure fiasco?
U.S. bankruptcy judge doubts bank foreclosure attempts
Catch-22: Modifications as solution to foreclosure mess
Bank of America to consider bankruptcy protection for Countrywide