New foreclosure mediation program to improve communication
10/16/2010 © Polk County Democrat
By MARY CANNADAY
With Florida having the highest inventory of foreclosed homes in the nation, The Florida Supreme Court assembled a committee of 15 people in 2009 to come up with possible solutions. Poor communication between buyers and lenders hinders the foreclosure process and for borrowers, lack of information is common. The Task Force on Residential Mortgage Foreclosure Cases concluded that early case management and mediation would save time and in some cases avoid foreclosure.
The court then ruled that home lenders must spell out the foreclosure process to borrowers and must give them the opportunity to meet with a mediator, lender representative and other key officials to try to hammer out a new agreement. The goal is to reduce the stockpile of empty, foreclosed homes; to help motivated borrowers keep their property and to loosen the stranglehold on Florida’s courts.
The new law kicked in on July 1 requiring that mediation be offered in all foreclosure cases. Cases pending before that date can mediate also, but must apply. The lender pays for the service.
Local mediation programs are supervised by the Collins Center for Public Policy in Tallahassee. The Central Florida Mediation Group LLC, on U.S. Highway 98 South, coordinates the operation for the 10th Judicial Circuit, comprising Polk, Highlands and Hardee counties.
Mediators attend specialized training at the University of South Florida and other sites around the state, and upon completion, they are placed on rotation with the local center where the mediations are held.
William Blakeman, a Bartow attorney, has added the foreclosure mediations to his existing expertise in family and civil mediation. Blakeman was certified by the Florida Supreme Court in 1995 to conduct family law mediation, covering issues from visitation to alimony. The veteran mediator says he believes the new program can work for motivated parties.
Guidelines are well-defined and the entire process, from notification and filing of foreclosure to mediation, must be completed within four months, he explained.
The process starts with a requirement the borrower attend financial counseling, with a HUD-approved provider. This is paid for by the lender as part of the overall $750 mediation fee. After counseling is completed, mediation is scheduled through the Central Florida Mediation Group.
Blakeman stresses that the program is in its infancy, with cases just now coming in from borrowers who have completed the financial counseling segment. He expects the program to ramp up, but when asked about possible obstacles to people using the process he acknowledges there are a couple.
The borrower may not want to work things out and in some cases may be wary of having to move out sooner than if worked though the courts. Some may be afraid of the mediation process itself.
Those who do come to the table must be ready to justify a new agreement, bringing financial statements, proof of income and other documents that prove they can succeed with a renegotiated plan, Blakeman noted.
The mediations could have a number of outcomes, Blakeman said. Among them are refinancing, deeding the property back to the bank, having a lowered interest rate, extending the length of the loan, or allowing the homeowner to rent the house until it is sold by the bank. Whether bringing parties to the table succeeds in reducing foreclosures and unclogging the courts remains to be seen.
The Florida Supreme Court is keeping tabs on the project, though, and is requiring that some statistics be reported to them by Dec. 28, 2010 — one year from the date they first ordered the new program. They will be looking at whether borrowers were successfully contacted, which parties did or did not show up for mediation and what percentage of the mediations resulted in completed agreements.
10/16/2010 © Polk County Democrat
By MARY CANNADAY
With Florida having the highest inventory of foreclosed homes in the nation, The Florida Supreme Court assembled a committee of 15 people in 2009 to come up with possible solutions. Poor communication between buyers and lenders hinders the foreclosure process and for borrowers, lack of information is common. The Task Force on Residential Mortgage Foreclosure Cases concluded that early case management and mediation would save time and in some cases avoid foreclosure.
The court then ruled that home lenders must spell out the foreclosure process to borrowers and must give them the opportunity to meet with a mediator, lender representative and other key officials to try to hammer out a new agreement. The goal is to reduce the stockpile of empty, foreclosed homes; to help motivated borrowers keep their property and to loosen the stranglehold on Florida’s courts.
The new law kicked in on July 1 requiring that mediation be offered in all foreclosure cases. Cases pending before that date can mediate also, but must apply. The lender pays for the service.
Local mediation programs are supervised by the Collins Center for Public Policy in Tallahassee. The Central Florida Mediation Group LLC, on U.S. Highway 98 South, coordinates the operation for the 10th Judicial Circuit, comprising Polk, Highlands and Hardee counties.
Mediators attend specialized training at the University of South Florida and other sites around the state, and upon completion, they are placed on rotation with the local center where the mediations are held.
William Blakeman, a Bartow attorney, has added the foreclosure mediations to his existing expertise in family and civil mediation. Blakeman was certified by the Florida Supreme Court in 1995 to conduct family law mediation, covering issues from visitation to alimony. The veteran mediator says he believes the new program can work for motivated parties.
Guidelines are well-defined and the entire process, from notification and filing of foreclosure to mediation, must be completed within four months, he explained.
The process starts with a requirement the borrower attend financial counseling, with a HUD-approved provider. This is paid for by the lender as part of the overall $750 mediation fee. After counseling is completed, mediation is scheduled through the Central Florida Mediation Group.
Blakeman stresses that the program is in its infancy, with cases just now coming in from borrowers who have completed the financial counseling segment. He expects the program to ramp up, but when asked about possible obstacles to people using the process he acknowledges there are a couple.
The borrower may not want to work things out and in some cases may be wary of having to move out sooner than if worked though the courts. Some may be afraid of the mediation process itself.
Those who do come to the table must be ready to justify a new agreement, bringing financial statements, proof of income and other documents that prove they can succeed with a renegotiated plan, Blakeman noted.
The mediations could have a number of outcomes, Blakeman said. Among them are refinancing, deeding the property back to the bank, having a lowered interest rate, extending the length of the loan, or allowing the homeowner to rent the house until it is sold by the bank. Whether bringing parties to the table succeeds in reducing foreclosures and unclogging the courts remains to be seen.
The Florida Supreme Court is keeping tabs on the project, though, and is requiring that some statistics be reported to them by Dec. 28, 2010 — one year from the date they first ordered the new program. They will be looking at whether borrowers were successfully contacted, which parties did or did not show up for mediation and what percentage of the mediations resulted in completed agreements.
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