I am excited about a major change in handling of residential property foreclosures in Florida. The Florida Supreme Court has mandated a system of managed mediation for all Judicial Circuts in the state.
IF YOU WORK IN LENDING, FORECLOSURES, SHORT SALES, REO OR HAVE REAL ESTATE CLIENTS WHO MAY BE IMPACTED BY THESE TOPICS – PLEASE JOIN THIS GROUP AND CONTRIBUTE YOUR KNOWLEDGE AND EXPERIENCE TO THIS DISCUSSION.
My recent article on the new system may be found <here>.
The Administrative Order is recent (Dec 2009) and the implementation is gradual. Each Judicial Circuit (20 in the State) must contract with a Project Manager – a non-profit company which will handle the administration, facilities and equipment and schedule the mediators and cases.
The Florida Supreme Court found that defendants were coming to Court for final hearings in the foreclosure process without ever talking to the lenders about their situation having an opportunity to work out the problems.
The benefits to the lender and the homeowner come from two unique facets of the process. First, the homeowner and the lender are required to exchange some important information prior to the mediation session. The homeowner provides his current financial information (package like what you might be submitting for a short sale offer now) and the lender provides information from their file on the history of the loan and the status at the time of case filing. The homeowner is also required to meet with a foreclosure counselor (HUD approved) prior to mediation so that he (she) is aware of the process prior to meeting with the lender.
Second, the dynamics of the Mediation process is very different from litigation. The result of a foreclosure action is the homeowner loses his (her) house to the bank. The problem here is that the bank doesn’t want the house and the homeowner doesn’t want to lose the house. So rather than proceed with the foreclosure litigation, Florida will try to resolve the problem using an alternate dispute settlement process – in this case mediation.
In mediation, the mediator is a neutral individual whose task is to facilitate the settlement of the case between the parties on terms that are acceptable to both sides (and more if there are additional parties). This may be a modification of the loan or some other terms on which the parties may agree.
This is a big deal if your business interest is in Florida. But if the experiment is successful here, there may be similar systems created for other States.
It is my hope that you will join and support this group with your experience and expertise with the program as it moves forward. Tell us how the system works for your clients or businesses. Tell us how the participants felt about the process and how it may have helped them or placed them at a disadvantage. Keep in mind that all mediations are confidential, so parties should not be identified in these stories.
Let us know how the system works for people you know.
[By the way, the photo image I have chosen for the post is the statue of Justice atop the Central Criminal Court building in London - better known as the "Old Bailey". It is a favored image of Justice for me with considerable history in the British legal system]
Additional information about Mediation in Florida at MidFloridaMediation.com