Minnesota attorney general Lori Swanson, state representative Debra Hilstrom and state senator Linda Scheid will make another attempt at pushing a foreclosure-mediation bill into law in 2010, according to an announcement from Swanson’s office, after their first try failed. The Homeowner-Lender Mediation Act will aim to bridge the gap between borrowers and servicers to discuss loan modifications, short sales or other foreclosure preventative measures. It requires lenders to offer borrowers the opportunity to participate in a non-binding mediation before the lender can foreclose on the home. Governor Tim Pawlenty vetoed a similar Act in last year's session. Currently, 14 states operate a similar program for homeowners who slipped too far down the foreclosure pipeline to benefit from the government programs such as the Home Affordable Modification Program (HAMP) and the Home Affordable Foreclosure Alternatives (HAFA) program to be launched in March. For example, the Florida Supreme Court enacted a foreclosure mediation program before the New Year. Similar initiatives are even popping up at city level with the Retaining Occupancy on Foreclosure (ROOF) program in Detroit, Michigan. For all the details, subscribe to the February issue of HousingWire, here. And in order to further combat problems in the state economy, the Minnesota Department of Commerce also made funds available to homeowners and renters struggling to meet the cost of basic needs. Under the Minnesota Energy Association Program (EAP), homeowners can receive help on their heating bill. An eligible household of four must have an income below $10,430 for the previous three months. The average grant ranges between $100 and $1,400 with the average size expected to be $600. Rep. Hilstrom, the author of the foreclosure mediation bill, believes that her work is part of a larger trend in the nation: “Around the country, courts and legislatures are stepping up to create a process where homeowners in trouble can work with their lenders to try to find solutions," she said. "Minnesota needs to step up too.” According to the proposed bill, the lender must serve a mediation notice and file proof with Swanson’s office. The borrower has 20 days to file a request after receiving the notice. If not, the lender can proceed with the foreclosure. If the lender begins a foreclosure against the borrower without notice, he or she could file a request with Swanson’s office. If the mediator determines that the lender is acting in “bad faith” during the mediation, the borrower can request court supervision of the proceedings. The court then orders the parties to mediate under the supervision for 180 days, if after that time, the court finds that the lender continues its “bad faith” practice, it will suspend foreclosure proceedings another 180 days. If the borrower acts in “bad faith,” the foreclosure proceedings may begin immediately. Under the current bill, the program would end Dec. 31, 2014. Write to Jon Prior.