Mediation Now Required for Florida Homesteaded Foreclosures
Programs to stem the tide of foreclosures have been marginally successful. Perhaps this new approach will improve the problem.
Palm Coast, FL – July 22, 2010 – Beginning July 19, all new foreclosures of homesteaded residences in Flagler, Putnam, St. John’s, and Volusia counties in Florida will be referred to mediation. These counties comprise Florida’s Seventh Judicial Circuit. The new program resulted from a Florida Supreme Court Order last year for courts to implement residential mortgage foreclosure mediation programs to help deal with Florida’s foreclosure crisis.
In 2008, 13,421 foreclosures were filed in the four-county circuit. The following year, the number of new foreclosure filings grew to 16,419.
"The courts system continues to struggle with a high volume of foreclosure cases. We’re hopeful that the residential mortgage foreclosure mediation program will produce positive results for both the homeowner and lender and bring an early resolution to cases, "said Chief Judge J. David Walsh.
All foreclosures of homesteaded residences filed on or after July 19 qualify. However, borrowers involved in the foreclosure of non-qualifying residential properties may request mediation through the court. Unless otherwise specified, court-ordered mediations involving non-qualifying residential foreclosures fall under the same program guidelines, the most important being that the program is funded by lenders.
Program highlights:
Upon the filing of a foreclosure case against a primary residence, a homeowner will be contacted by staff from the program. The homeowner will be encouraged to participate in the program and will be informed that participation requires a mandatory meeting with a HUD-certified financial counselor who will conduct an in-person comprehensive, substantive evaluation of the homeowner’s finances. Upon completion of foreclosure counseling a mediator will be appointed and a mediation date set so that the parties, with the assistance of a neutral, specially trained foreclosure mediator, can explore a variety of alternatives to foreclosure including but not limited to loan modification, short sale and deed in lieu of foreclosure. The cost of the program (capped at $750) is borne by lenders. However, some lenders have indicated that they may add the cost to the final judgment of foreclosure if the mediation results in an impasse.
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The borrower and lender control the outcome. The mediator simply facilitates the process.
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There is no cost to the homeowner/borrower so long as the mediation is successful.
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Parties have 60 days to prepare for the mediation. The total process, including the 60 preparation days is 120 days (max).
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Borrowers have access to a free certified foreclosure counselor who can provide valuable information on a variety of foreclosure avoidance options and help prepare Borrowers for the mediation.
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Borrowers will receive information from the Lenders regarding the mortgage at issue.
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Borrowers have an opportunity for direct communication with the Lenders to discuss their current financial situation and engage3 in settlement negotiations.
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A mediator will assist the parties in exploring alternatives to foreclosure.
The mediation manager for the Seventh Judicial Circuit is the Upchurch Watson White and Max Mediation Group of Dayton Beach. "Participation in the mediation process will help resolve those communications problems that are presently preventing the homeowner and lender from working out a mutually beneficial solution," said John Upchurch, a founding partner of Upchurch Watson White and Max.
Based on the number of inquiries from Judges, Program Administrator, Sandra Upchurch predicts an increase in the number of court-referred foreclosure cases. "In the past, Judge’s have been reluctant to order mediation because the costs were typically split between the lender and the borrower. That reluctance will change with lenders shouldering the costs," she says.
Sandra Upchurch can be reached at 386-523-1027 or toll free at 877-226-1312. The program is further explained on their website www.uww-adr.com.
[This story also appears in the July 22 edition of Palm Coast Observer whereToby Tobin is a contributing writer.]
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Mediation
Why should taxpayers shoulder yet another cost? What’s to mediate? Mortgage holders can’t or won’t make payments on their loans. We’re already overburdened with Obama’s redistribution schemes and don’t need to add another.
Foreclosure Crisis
Last year the legislature increased the cost of filing a lawsuit to foreclose through the roof. It now costs approximately $2,000 to start a foreclosure. This cost is advanced by the banks as a "court cost" and is tacked onto the balance due in the final judgment if the loan is not paid off. So also are the costs of mediation added to the final judgment. Based on my experience as a Court Appointed mediator the borrower can get a face to face talk with a lender’s attorney, while the lender sits in his office far away listening in on a conference call. The bank will rely on its own appraisers and may discount the loan up to 20%. but will not be sympathetic. Even though the mediation may be unproductive, I don’t think the borrowers should be waiving their right to mediate. Why? Because the Court will not proceed to a final hearing if the mediation is not finished. So, the extra time needed to Mediate the case may give borrowers much needed extra rent free time to use their home and find a buyer before they have to vacate.
Reply to Evelyn
It’s the lenders that are paying for the mediation. That means we won’t pay as taxpayers but we will pay as bank customers.