Self-Determination in Foreclosure Mediation: A Mediator’s Perspective

By: Jennifer Norlund Unger, MS-NCR ‘11

One of the hardest moments to watch in foreclosure mediation is a homeowner struggling with the reality of likely losing their home. As a person, it’s incredibly hard to watch the emotional and physical conflict that a homeowner goes through in this process. As a mediator, I have to take that mental step back and remember that it’s their issue and it will be their decisions that will determine the final outcome.

In a recent mediation, the homeowners learned that their combined income wouldn’t bring them close to the magic “31% gross income” to qualify for a modification of their $200,000 mortgage. It appeared hopeless for them. They put on brave faces as they shook hands with everyone and said they’ll figure out the next steps before coming to the next mediation.

In the mediation world, we call this “self-determination.”1 It’s a basic tenant of mediation that those who are in conflict (or at any decision point for that matter) have the power to make their own decisions. It has nothing to do with the wisdom of those decisions. Think free will or freedom of choice. As an experienced mediator, even I am in the constant state of checking my own self-determination. I may guide the process, but I can easily take away from the parties’ abilities to determine what they need when I appear heavy-handed with the process or force them to focus on a path that they don’t want to go down.

Working under the Washington State Foreclosure Fairness Act2, I’m balancing the seemingly opposed views of the “American Dream” (home ownership) and the bedrock of American principles (contracts and laws) during the discussions. It’s a very unique process that does have success -through difficult conversations and creativity inside the large “box” of laws, guidelines, and rules. But with it also comes considerable self-determination of either party. And that’s why the role of the mediator is so important in helping parties get to those moments of decision making and why we now consider foreclosure mediations in our state to be a “hybrid” approach. Using the community-based facilitative mediation skills with an emphasis on being settlement-focused, gives the parties the time and space to have these difficult conversations.

Throughout the mediation process, either side may make what I personally think are crazy decisions -financially (e.g. bank choosing to take a huge loss and foreclose on homeowners who can now easily afford their current mortgage rate) or emotionally (e.g. Homeowners who will consider putting every available penny to save an underwater house that needs considerable repairs when they could just walk away and start with a clean slate). In these cases, I must rely heavily on my facilitative mediation skills - building empathy, venting emotions, listening, helping uncover perspectives and underlying interests, and highlighting commonalities. But at the same time, I also need to have a strong knowledge of the foreclosure law in the state, general guidelines and industry standards, and become very familiar with the required documents that are being exchanged. However, I must be incredibly careful not to take away from either party’s decision making ability by injecting my own expertise. If I’m expected to be helping bring parties face-to-face so the homeowner can finally tell their story to a banker and create a plan together, then being the “expert” in the room takes away from the power of parties own decision making ability.

And our homeowners who left the mediation feeling hopeless, but determined? They regrouped and let everyone know that not only had the children moved back home, but some of the grandchildren as well. After another financial review, the bank came back with a modification offer. The homeowners happily signed on to a 40 year mortgage that was now at $400,000 (due to all of the arrearages) on a house that was now only worth $100,000. But the question remained: why would they choose to take on this staggering amount of debt when they could literally walk away and buy a new house, at a cheaper rate, almost immediately?

It turns out that they were a very tight knit family who wanted to ensure that while the grandparents were still alive, they had a home for them because it was a huge source of pride for the grandparents to come here from another country and be able to afford the “American Dream” to raise their family.

Maintaining ownership of the property, at whatever the cost, was the optimal outcome for the homeowners and that is exactly why allowing parties to make the determination of what’s best for them is the essence of a good mediation.


1Model Standards of Conduct for Mediators (2005). Retrieved from:

2Washington State Foreclosure Fairness Act (2011). Retrieved from: