PHILADELPHIA INQUIRER - July 21, 2018 Two months and 13 days before Linda DaCosta stepped into Courtroom 676 in Philadelphia City Hall, the single mom of twin girls answered a knock she never expected.
It happened on a Sunday, just before dinner, on one of those crisp April days that made her love West Philadelphia. Inside her newly renovated condo, her grade-school-age girls were watching TV. DaCosta, a 41-year-old nurse, had joined in, taking a reprieve from divorce filings, night shifts, and job applications that had consumed her for the last year.
Then came the knock and the doorbell, buzzing again and again. A man was outside, holding a stack of foreclosure documents. DaCosta was being served. DaCosta, who left her full-time job as a clinical nurse coordinator in June 2017 to care for a sick family member, knew that her mortgage situation was dire. The missed payments had accumulated since September of last year, ballooning until April. But never did DaCosta think her bank would foreclose — after all, she had been negotiating to modify her loan, she said. Still, the lawsuit came. And by the time it did, DaCosta owed more money on her house than she had initially borrowed.
“I was standing at my door, and I’m hyperventilating. I’m saying to myself, ‘You have to calm down. The girls can’t see you like this,’ ” DaCosta said. “From there, the rest of the day was a full-on panic.”
Immediately, DaCosta called her lender, who told her to appear in court on the scheduled date, she said. But as time passed, stress mounted, and as more bill collectors called, DaCosta began to wonder: Should she bother with court at all? “I was so low … I thought, what are we going to even do” in court? DaCosta said. She was intimidated and confused about how it would work. “There were so many things that told me, ‘Don’t go.’ ” Yet on July 5 — 15 minutes before she was due to arrive — something, somehow changed DaCosta’s mind. So that Thursday, she strode into the courtroom and took a seat in the row of worn, wooden chairs in the center of the room.
‘Organized’ courtroom chaos
Courtroom 676 appears to be an ordinary courtroom inside the winding hallways of City Hall. Gold columns tower behind the court’s bench, while oil paintings of judges decorate the walls. A jury box sits in the corner. Flags rest in place. Every Thursday, however, the courtroom transforms. Court is in session, yet no judge presides. Defendants like DaCosta appear, but no jury decides their fate. The city has operated its Residential Mortgage Foreclosure Diversion Program every week since April 2008 with one mission: keeping residents in their homes. Spearheaded by Judge Annette M. Rizzo to combat the foreclosure epidemic that sprouted from the Great Recession, the program — considered the first in the nation — still has thousands of participants today.
The program works by simply pausing a foreclosure process that otherwise would be careening toward sheriff’s sale, staffers say. According to the rules established by the court, all homeowners with a foreclosure complaint against them are entitled to attend a “conciliation conference,” in which they can meet with a housing counselor — and an attorney, if needed — who will take on the case for free. Then, the counselor and attorney negotiate with a mortgage company’s lawyers, arranging, for example, a loan modification to allow for lower payments. If that is not possible, the program will allow homeowners to exit gracefully, letting them sell their homes for less than what is owed, among other alternatives. (Only owner-occupied residential properties experiencing a mortgage foreclosure are eligible for the program.
Tax foreclosure cases are handled separately.) The result is what even some staffers call “organized chaos.” Each week, dozens of sharply dressed attorneys for mortgage lenders square off against the city-funded counselors and attorneys, hashing out deals at tables, banisters, and in corners of the room, as homeowners look on. Intermittently, counselors will scurry back to a homeowner, asking questions or distributing paperwork. If any disagreements arise, a presiding law clerk helps settle them then and there. To observers, the simultaneous negotiations may seem impossibly casual. But in the last decade, the program has saved more than 11,808 homes, according to city data, a 55 percent success rate. A total 21,399 homeowners have participated in the program, data show, though 9,600 homeowners citywide still eventually lost their homes. Nearly 5,900 others are currently participating.