Florida Mortgage Mediation Program Closes Its Doors: What This Means for Florida Home Owners Facing Foreclosure

Posted By on December 22, 2011

The Florida Supreme Court’s top judge just signed an order on December 19, 2011, that shut the doors on the Florida Managed Foreclosure Mediation Program that the Supreme Court had set up back in 2009.  You can read the Administrative Order (AOSC11-44) signed by Chief Justice Charles Canady online here.

What happened? Back in 2009, the Florida Supreme Court tried to solve the backlog of bottlenecked foreclosure lawsuits filed across Florida by ordering banks to mediate with homeowners.  Successful medations mean the lawsuits are resolved, and they get moved off the court dockets.  It was a good idea, if it had worked.

But it didn’t, and it was no big surprise that it failed.  As we discussed in a prior post, the bankers were notorious for showing up at the Court-ordered mediations with homeowners just to get their attendance noted on the roll call.  If the Court asked, sure the bank was there.  However, there wasn’t a serious move to mediate with homeowners to resolve the foreclosure lawsuits.

The numbers speak for themselves:  96% of the mediations failed.  That’s not a typo — it’s Ninety-Six Percent.

Guess what the banks were not bringing with them to the mediation table?  Coffee?  Mints?  Nope.  The note and mortgage paperwork that we have been discussing this month in various ways.  Back in March 2011, the media was investigating the mediation situation and reporting on how banks were failing to bring valid notes and mortgages to the mediation table.  Without that documentation, the mediation of the foreclosure lawsuit could not be finalized.

For background:

1.  Read our earlier discussion on defining notes and mortgages, “Florida Foreclosure Defense Basics: The Difference Between Your Note and Your Mortgage and Your Deed of Trust (and Why You Should Care About This).”

2.  Consider how the legal requirement of “standing” is a growing problem for Florida banks with bad or lost paper, “The Power of Real Estate Law: Banks Cannot Legally Foreclose Upon Real Estate Loans They Don’t Own (Even Though YES They’ve Been Foreclosing On Homes Without Them)“;

3,  Watch how in December 2011, Florida appellate courts look to be bringing banks to task regarding their paperwork in “Florida Homeowners Win One Battle in Foreclosure Fraud as Florida Appeals Court Rules In Their Favor in McLean v. J.P. Morgan Chase.”

What is a Mediation Anyway?

A mediation is a form of “alternative dispute resolution” to use lawyer lingo.  It’s akin to a settlement negotiation, except it has an independent third party running the show.  (In a settlement, the parties and their lawyers meet at a table to iron out a deal.)  This independent third party has been trained and approved as a “mediator” and usually has a track record of mediating disputes in a certain area, for example, foreclosures.  (Some mediators focus on divorces; some focus on tax disputes; etc.)

The mediation is scheduled for a certain time and date.  It occurs either at the mediator’s offices or at an agreed-upon location.  Each side has their own conference room, where they can talk privately, and the mediator moves from room to room, talking things out.  It’s not a face to face encounter between the parties.  The home owner and his foreclosure defense attorney sit in one room, there’s no confrontation with the other side.

Good mediators can be very effective in making deals.  The mediation format, where there’s no face to face but everyone is in the same spot, can also be conducive to working out a dispute.

For Florida homeowners with underwater mortgages or those facing foreclosure, mediation can be a smart solution to end a possible or pending foreclosure action.  However, without a bank willing and able to make a deal, the mediation isn’t an answer.  Florida homeowners in these situations are just wallflowers at the school dance, sitting there and waiting for something to happen.

And that, bottom line, is what the Florida Supreme Court recognized when it signed its Adminsitrative Order cancelling its Managed Foreclosure Mediation Program.

What does this mean for Florida home owners?

Not much, really.  With a 96% failure rate, these mediations weren’t helping Florida home owners anyway.  Mediations need cooperative parties willing to deal if they are to succeed.  More and more, it looks like the only place for Florida home owners to find justice is in fighting their foreclosure with an experienced foreclosure defense attorney in a courtroom.

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