A bill introduced Monday in the Assembly would codify into statute the judiciary’s four-year-old Foreclosure Mediation Program and fund it through increased filing fees.

The program was launched in 2009 by the judiciary in conjunction with Gov. Jon Corzine, the state Attorney General’s Office, Legal Services of New Jersey and other agencies.

Court rules were modified to require repeated notification to homeowners of the availability of free mediation, at the time of filing of a foreclosure complaint and 60 days after filing.

The legislation, A-3396, would enhance and expand the program and create a source of financing — a “Foreclosure Mediation Fund” in the state treasury, to be maintained by the Administrative Office of the Courts and paid for by increased filing fees.

The measure would increase the foreclosure action filing fee to $250 from $200, and dedicate the additional $50 to the fund. Any civil penalties collected by judicial sanction, as well as any interest accrued, also would be credited to the fund.

The program would be available to qualifying homeowners — those who own and live in foreclosed, one- to three-family houses. Judges could order mediation whenever a homeowner files an answer to the complaint or submits a mediation request. If the request is made postjudgment, the homeowner could seek a stay on the sheriff’s sale.

To encourage participation, the program would continue to be free of charge for homeowners, who would receive several notifications throughout the process that mediation is available.

Lenders would be required to send to mediation sessions representatives who have authority to grant loan modifications, workouts, refinancing or other alternative resolutions.

In addition, if either party or the party’s attorney fails to attend the scheduled session or make a good-faith effort to mediate, the court — depending on whether the conduct was intentional — could impose a fine of up to $1,000, order payment of attorney fees or litigation expenses, or impose “any sanction the court deems appropriate.”

The judiciary supports the bill, spokeswoman Tammy Kendig says.

In the 12 months before the existing program began on Jan. 5, 2009, courts received 46,130 new residential foreclosure filings, a 46 percent increase over the 31,667 filings the year before, according to judiciary statistics. At the time, 95 percent of all foreclosures ended in default.

Prior to the statewide launch, the Middlesex vicinage was operating a pilot program with free mediation services provided by volunteers from the Middlesex County Bar Association.

Homeowners seeking foreclosure mediation are required to work with a housing agency certified by the Department of Housing and Urban Development or the state Housing Mortgage Finance Agency.

The cases are mediated by volunteer attorneys who have received at least 18 hours of training, as required by Court Rule 1:40. The judiciary maintains a roster of qualified mediators, who, as of August, numbered 630 statewide.

The program — and those like it in 14 other states — caught criticism from the National Consumer Law Center in a September 2009 report. At that point, the program had helped 585 homeowners avoid foreclosure, according to the report, but an organization lawyer cited a low participation rate in New Jersey’s program.

Participation has varied from year to year, according to judiciary statistics. From the program’s inception through the end of August, homeowners filed 12,453 requests for foreclosure mediation, with 8,690 completing mediation.

Of those cases, 3,860 (44.4 percent) settled, nearly one-third of them before mediation proceedings began. The remaining 4,830 (55.6 percent) did not settle.

So far in 2012, courts have scheduled 1,307 foreclosure mediations. There were 3,664 scheduled in 2011, 4,886 in 2010 and 2,596 in 2009.

The program was the subject of an Oct. 3 Supreme Court order mandating that requests for mediation be served by the date of entry of final judgment “absent exceptional circumstances.”

Previously, the program was available to homeowners who filed a request for mediation before the sheriff’s sale.

The measure is sponsored by Assemblywoman Bonnie Watson-Coleman, D-Mercer. There is no corresponding Senate measure.