Few Mandatory Florida Foreclosure Mediations Succeed
Written by Rachel Tannenbaum on November 3, 2011
By Rachel Tannenbaum
Florida’s state-ordered home foreclosure mediations, which state judges require before any home foreclosure, are more necessary than ever, says program director Ned Pope, though only a small percentage succeed.
There are certainly plenty of cases, yet fewer than 4% of those eligible for mediation reached a mediation agreement in a one-year period.
In the year ended in March, 78,076 foreclosure cases were eligible but fewer than 3,000 closed with agreements. The next report is due Nov. 30, said Arlene Johnson of the Research and Data at the Office of the Supreme Court Administrator.
"If the state of Florida drops below 2,000 residential foreclosures per month you could make a case that the volume does not justify the program’s existence," Mr. Pope said, "but the state of Florida currently sees about 22,000 residential foreclosures per month. There is a long way to go before anyone can make the determination that the program is not necessary."
To be eligible for the program, Ms. Johnson said, a lender’s attorney must provide complete contact information, a case number, full payment of all fees and a document that indicates the case is eligible.
In the year ended in March, 32,798 borrowers were contacted, with 14,419 mediations scheduled and 11,151 mediations conducted. Reasons to close mediation include failure for borrower to appear, failure for lender to appear, and failure for both borrower and lender to appear.
Created in May 2009, the program was intended to offer a uniform, statewide approach to manage the massive volume of residential mortgage foreclosures and help solve problems between the parties, according to the Supreme Court of Florida.
The Mortgage Foreclosure Mediation Program, administered by the non-profit Collins Center of Public Policy, doesn’t use taxpayer or court funding. Mr. Pope said it’s entirely funded by user fees charged to the banks. The mediation program is used in every court circuit in the state, with the Collins Center operating in five of them.
The participation rate at the Collins Center is up 40% and the state average up about 30%, Mr. Pope said.
One main reason people hesitate to use the program, Mr. Pope said, is that it’s hard for them to distinguish the court-appointed program manager from the flood of other people contacting them offering foreclosure assistance for a fee.
"Our recommendation to them is to always check the court’s website to see who the official provider is for their area, check our website to gather information on us as an organization, or simply ask what the service costs," Mr. Pope said. "If someone’s trying to charge them to participate, then they are probably not part of any court program."
The courts are now meeting before people are foreclosed upon, and Mr. Pope said the mediation program is able to get a hold of the participants two months into the process, not eight to nine months in, as was previously true, when the foreclosure process has already begun.
"At two months delinquency there is a much better chance that they will still be living in the residence and are interested in exploring their options to avoid foreclosure," Mr. Pope said. "This makes them much more responsive to our outreach."
In many cases, Mr. Pope said, borrowers going through foreclosure have been delinquent more than eight months before the bank actually forecloses. Thus, they’ve already conceded that they’ll be losing the home or have already abandoned it. Mr. Pope wants borrowers to know that the state-mediation program does have a high success rate.
"Half of the participants end up with some resolution," Mr. Pope said, "and the program’s biggest problem is that people need to understand that this is a free program that it is there to help with foreclosures."
The biggest challenge the state-mediation program faces, Mr. Pope said, is getting the word out, because the courts don’t have money for public relations.
Mr. Pope disputes program statistics as an accurate depiction of its success rate. He said numbers from Ms. Johnson’s office only tell half of the story.
From March 2010 to March 2011, she said, 2,835 of the eligible referrals statewide closed with written mediation agreements and 7,426 without them.
"Statewide reports show that the [Office of Supreme Court Administrator] reports only shows what happens in mediation, so to get the real numbers you need to check court dockets," Mr. Pope said. "They would need participation from the clerks of court to make a true evaluation of the programðí:’s effectiveness."To read the entire issue of Miami Today online, subscribe to e -Miami Today, an exact digital replica of the printed edition.