08/01/2009 05:12 am ET Updated May 25, 2011

Philadelphia's Foreclosure Prevention Program Is Mandatory For Banks -- Unlike Obama's Making Home Affordable

Reuters reports today that the Mortgage Foreclosure Diversion Pilot Program in Philadelphia has saved almost 60 percent of participants from foreclosure -- 2,776 out of 4,690 from June 2008 to May 2009.

At the Philadelphia City Hall celebration for the program's one year anniversary, State Supreme Court Chief Justice Ronald Castille said, "Even if you saved just one house, that would have made this program a success."

The 1.2 million families across the US who have been displaced by foreclosure in 2009 alone might beg to differ.

The Philadelphia Foreclosure Diversion Pilot Program makes it mandatory for lenders to refer all foreclosure cases to the program. Judges, housing advocates and attorneys mediate the process which, in the end, benefits both homeowners and banks: struggling homeowners are able to stay in their homes, and lenders won't end up having to sell the repossessed properties for less than they're worth.

Nationally, foreclosures are at a record high -- there are new 6,600 foreclosures every day, or one every 13 seconds. Stopping this downward spiral is key to shoring up the economy. Obama's Making Home Affordable program, launched in February 2009, aims to help 7 to 9 million homeowners stay in their homes through refinancing and loan modification. So far, the Department of the Treasury estimates that 50,000 loans have been modified -- but many homeowners, even those who eventually received loan modifications, have faced an administrative nightmare, citing lost paperwork and delays.

The difference between the Philadelphia program and Obama's Making Home Affordable program is that the Philadelphia program makes it mandatory for lenders to negotiate with homeowners. Under the Obama program, it's still voluntary.

HuffPost's Eyes & Ears is collecting foreclosure stories for our Dispatches on the Displaced series. We've highlighted stories from homeowners who are going through foreclosure, and those pursuing foreclosure alternatives such as short sale, a deed in lieu and loan modification.

We'd like to hear firsthand from anyone who's had an experience with the Philadelphia Foreclosure Diversion Pilot Program -- whether you were among that lucky 60% whose mortgage was modified, or if you didn't receive a modification. Contact us at

And we're still collecting stories from homeowners outside of Philly, so send your foreclosure stories to And sign up here to receive further updates about our foreclosure project.

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