The End of Florida’s Mandated Foreclosure Mediations
December’s close marked the end of the court-mandated foreclosure mediation program. Although mediation remains an option for parties, and existing or pending mediations will carry forth as planned, no new court mandated mediations shall be filed. This concludes a two year saga as the courts looked for an option to alleviate a stressed system that suffered from an inundation of cases, budget cuts, and staff reductions.
The goal of the program was to allow the borrower and lender one final chance at finding compromise before the case came before a judge. But, for many reasons, the system failed. A review published in September 2011 illustrated the difficulties in reaching agreement. While civil court mediations are often successful, with a near 70 percent conclusion rate, the foreclosures lagged behind. The state of Florida had a 3.6 percentage mediation success rate. In Palm Beach County: only 1.6 percent. Other sources showed that 67 percent of all mediations came to an impasse with no agreement, with only a 4 percent success rate overall.
Much of the low rate of success can be attributed to the fact that many borrowers simply could not be located. 59 percent of eligible borrowers were unreachable. Only 14 percent of those who were contacted opted to participate. Palm Beach County had a 60 percent rate for unfound borrowers, while retaining a higher 29 percent attendance rate.
It seemed that the system was doomed to fail from the beginning. Many Lenders saw the mediations as just another step in the lengthy foreclosure cases, rather than focusing on compromise. They purported that before the foreclosures ever came to trial there would be earlier attempts to find some sort of agreement or modification to their loan structure. One South Florida foreclosure defense attorney, as quoted in the Palm Beach Post, agreed. ”You have someone on the phone from the bank and the only thing they have is a computer monitor in front of them and the only thing they can do is modify,” he said. “It’s not mediation; its modification or bust.”
One big wrench in the mediation process was that homeowners may not qualify for these standard ‘modifications’ to begin with, while the lender had little incentive to derivate from its normal payment plans. Homeowner advocates also complained that many lender representatives weren’t authorized to make changes in the first place. In October, a committee of independent judges recommended an end to the program. All in all, the close of the program is of little probable importance. Avenues for mediation are still open, while the lengthy process for foreclosure mediations has been marginally streamlined. The program failed not for want of intent, but for lack of justification based on the low success rate.
As always, if you are in foreclosure or in the risk thereof, contact your attorney immediately. The offices of Santucci Priore, P.L. are always willing to aid any homeowner in their time of need.
A link to the full order signed by Judge Charles T. Canady can be found here.
