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U.S. mayors held a conference call today to “discuss innovative local solutions to the foreclosure crisis.” Mayors from Miami, Philadelphia, New York City, Los Angeles, St. Louis, and the city administrator from Oakland, CA were all on the call.

Instead of focusing on mulitple innovative solutions, the call focused on only one: Philadelphia's Mortgage Foreclosure Protection Plan. This plan allows lenders and homeowners to come together—in person-- and modify their loan together. Despite different cities' foreclosure rates, all the mayors and representatives on the call supported Philadelphia’s plan and seemed to want to implement it in their cities.

During the call, Mayor Francis G. Slay of St. Louis brought up a critical concern: How can they get the banks on board on this plan?

According to Mayor Michael Nutter of Philadelphia, the answer is simple. Banks do not gain anything from continuing to foreclose homes. In fact, they are better off helping homeowners stay in their homes and working something out. The mediation method in the Mortgage Foreclosure Protection Plan hinges on being able to get support from lenders. As Mayor Nutter says, it’s the lender who has the final word.

"Well, ultimately of course it’s the lenders decision, it’s their mortgage. But again, if he has good faith mediation, everybody is trying to accomplish what has been referred to a triple win. The lender doesn’t want to own the house. The homeowner wants to stay in the house, and the city interest of course, is for people to stay in their homes as well. If you have a good faith mediation and legitimate dialogue, the process that everyone is already agreeing works, should lead you to a natural conclusion and a relatively positive outcome, but it’s always ultimately up to the lender as to whether they want to be a cooperative lender."

Good faith mediation is what everybody is looking for, and thus far Mayor Nutter says they have been successful. It’s not in the lenders interest' to have the foreclosed property. According to ACORN CEO Bertha Lewis, good faith mediation is not easy to accomplish and that is why it’s important for homeowners to come into mediation with counselors who can represent their interest. 

Lewis says there have been problems when the mediation between lenders and homeowners has not been mandatory. “We get calls all the time from other house counseling agencies who have said, time and time, lenders will not come in good faith," she says. "You know, there are still flipping and selling off and slicing and dicing of these properties that went off before."

City administrator Dan Lindheim from Oakland says his city is dealing with another issue -- tenants in multi-unit housing. Oakland is working with tenants trying to get them to pay their utilities when the owner of the building abandons them.

Even though Philadelphia’s plan has been successful thus far, it's yet to be seen whether this plan works in other cities.