So clogged is Florida’s legal system with nearly half a million pending foreclosures that the state’s Supreme Court has issued an order requiring managed mediation programs to speed up the stalled cases.
Chief Justice Peggy Quince issued the order to address the state’s unabated foreclosure crisis, supporting a recommendation from a court-appointed task force.
Florida has the third-highest mortgage delinquency rate in the nation – after California and Nevada – with an estimated 456,000 pending foreclosure cases.
The mediation program is not a new concept for the Sunshine State. Some circuit courts have already started the practice which requires a nonprofit organization to conduct the mediation at a cost to the plaintiff.
An explanation of the court required mediation program is normally explained to the homeowner along with a foreclosure summons. Mediation fees of up to $750 are paid by the plaintiff. Between 60 and 120 days later, a mediation session between the borrower and lender is scheduled. If mediation is successful, the case is settled. If there is no resolution, the case proceeds to court litigation.
However, “managed mediation” is not necessarily a ticket to a loan modification that will keep distressed borrowers in their homes, mediators warn.
In many cases, real estate attorney say, a homeowner’s finances are basically reviewed by a lender to determine whether the borrower’s debt-to-income ratio can qualify for a loan modification. Mediators are not advocates for the homeowner, they say.
“Mediators are not supposed to advise, they may ask probing questions, but it’s a slippery slope,” Fort Lauderdale real estate attorney and foreclosure mediator Shari Olefson told the Palm Beach Post. “This isn’t really a mediation. It’s like a meeting with a baby sitter there.”
Nonetheless, the rate of cases that are settled in mediation is up to 75 percent. And such programs normally succeed in their judicial mission of unclogging court dockets.
“You want to get the cases that are going to settle to settle early before they use up a lot of judicial resources,” said Miami-Dade Circuit Court Judge Jennifer Bailey, who was on the task force that recommended mandatory mediation. “The dysfunction has been an inability to communicate between the borrower and the lender.”