2713.1 Each mediation party or authorized representative of a mediation party shall make a good faith effort to mediate all issues.

2713.2 A good faith effort to mediate requires the lender to conduct the following loss mitigation analysis:

(a) Evaluate the eligibility of the borrower(s) for alternatives to foreclosure including, but not limited to, reinstatement, loan modification, forbearance, short sale, and a deed in lieu of foreclosure;

(b) In considering a loan modification, evaluate the eligibility of the borrower(s) for each loan modification program applicable to the residential mortgage in default and include an analysis pursuant to the Home Affordable Modification Program and the Federal Deposit Insurance Corporation’s Loan Modification Program;

i. If the lender is a Community Bank, it must evaluate all eligible loan modification programs and include an analysis pursuant to the Home Affordable Modification Program, the Federal Deposit Insurance Corporation’s Loan Modification Program, or any loan modification program that is based on accepted principles and the safety and soundness of the institution and approved by the Commissioner.

ii. If the lender is a Credit Union, it must evaluate all eligible loan modification programs and include an analysis pursuant to the Home Affordable Modification Program, the Federal Deposit Insurance Corporation’s Loan Modification Program, or any modification program that is based on accepted principles and the safety and soundness of the institution and is recognized by the National Credit Union Administration;

(c) Offer the borrower(s) a loan modification at the best terms available for a loan modification if the net present value of receiving payments pursuant to a modified mortgage loan is greater than the anticipated net recovery following foreclosure based on a calculation using the Federal Home Affordable Modification Base Net Present Value Model or the Federal Deposit Insurance Corporation’s Loan Modification Program;

i. If the lender is a Community Bank, offer the borrower(s) a loan modification at the best terms available if the net present value of receiving payments pursuant to a modified mortgage loan is greater than the anticipated net recovery following foreclosure based on any

net present value model that a Community Bank uses that is based on accepted principles and the safety and soundness of the institution and approved by the Commissioner;

ii. If the lender is a Credit Union, offer the borrower(s) a loan modification at the best terms available if the net present value of receiving payments pursuant to a modified mortgage loan is greater than the anticipated net recovery following foreclosure based on any net present value model that a Credit Union uses that is based on accepted principles and the safety and soundness of the institution and is recognized by the National Credit Union Administration.

(d) If the loan has been sold to a third party investor and the loan servicing agreement permits, offer the borrower(s) a loan modification at the best terms available for a loan modification if the net present value of receiving payments pursuant to a modified mortgage loan is greater than the anticipated net recovery following foreclosure based on a calculation using the Federal Home Affordable Modification Base Net Present Value Model or the Federal Deposit Insurance Corporation's Loan Modification Program.

2713.3 In the event a lender rejects a settlement involving an alternative to foreclosure that has a lower cost than foreclosure, the lender shall provide a written explanation for rejecting the settlement. The explanation shall include an analysis and supporting documentation and, where applicable, the inputs and outputs of the approved net present value model identified pursuant to Subsection 2713.2(c).

2713.4 A mediation party fails to mediate in good faith if the party:

1. (a) Fails to provide information required in Section 2714;
2. (b) Fails to attend a mediation or other meeting scheduled by the Mediator as required by Section 2712;
3. (c) Fails to make a good faith effort to mediate all issues as required by Subsections 2713.1 through 2713.3; or
4. (d) Fails to provide a written explanation as required by subsection 2713.3.

2713.5 A preliminary determination that a mediation party has failed to mediate in good faith shall be made by the Mediation Administrator in accordance with this chapter.

SOURCE: Emergency and Proposed Rulemaking published at 58 DCR 2958 (April 8, 2011)[EXPIRED]; as Banking and Financial Institutions

amended by Emergency and Proposed Rulemaking published at 58 DCR 8247 (September 23, 2011)[EXPIRED]; as amended by Final Rulemaking published at 58 DCR 11469 (December 30, 2011); as amended by Final Rulemaking published at 61 DCR 6390 (June 27, 2014).