Researchers at the Federal Reserve Bank of Cleveland found that foreclosure mediation programs in Cuyahoga County could be a model for other areas looking to bridge the gap between delinquent borrowers and overwhelmed mortgages servicers. States and municipalities set up mediation programs in the wake of the foreclosure crisis in order to give borrowers the opportunity to sit down with banks in order to find some alternative to foreclosure. Roughly 90% of borrowers that elect to participate in Cuyahoga County's mediation program, which serves the greater Cleveland area, received resolutions to their delinquency, ranging from modification to deeds-in-lieu of foreclosure. In 2010, one-third of all Cuyahoga County borrowers applied for mediation, compared to one-fifth the year before. Meanwhile, foreclosures in the area have increased. There were 7,471 foreclosure filings in the Cleveland area in the third quarter, up 13% from the previous quarter and 2% from a year ago. "The increased participation may be driven by increased awareness of loan modification programs, but that alone does not explain why such discussions are not taking place before the parties enter the court system," according to the report from the Cleveland Fed. "One commonly reported issue is that borrowers, lenders, and servicers have a difficult time connecting outside the auspices of the courts." Servicers have come under fire from several federal regulators, all 50 state attorneys general and lawmakers for allegedly signing foreclosure documents en masse without a proper review of documentation and foreclosing on homeowners waiting for modifications with many borrowers complaining of a disconnect between them and the servicer. The Cuyahoga County program launched two years ago. Both the state of Florida and Washington, D.C. instituted similar programs, and Fannie Mae contracted with a technology provider last week to provide support for its own mediation program. The Cleveland Fed pointed out that the program does slow down the foreclosure process, piling up costs for lenders. Still, the Fed found Cuyahoga County borrowers are spending less time in mediation. On average, it takes 12 months for a lender to complete a foreclosure in the area, but in June, the average length of a foreclosure action for borrowers that participated in the program was 193 days, including time in courts if no mediation took place. "With no direct communication between the parties, there is practically no chance for an outcome other than foreclosure," according to the report. Write to Jon Prior.