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EDITOR’S NOTE: The mediation program can’t work. If you have one real person on one side and Donald Duck on the other, nothing but a fictional characterization of mediation is happening. see foreclosures-jump-modifications-plummet

Florida foreclosure mediation report shows program is struggling to log successes

By Kimberly MillerPalm Beach Post Staff Writer

Posted: 3:53 p.m. Wednesday, Dec. 29, 2010

Florida homeowners have had scant success in the state’s required foreclosure mediation program with just 6 percent leaving the negotiating table with a resolution.

The first statewide measure of the program, which the Florida Supreme Court made mandatory one year ago, was released Wednesday with information from seven of the state’s 20 circuit courts.

Because several circuits, including Palm Beach County, did not start mediation until July, their numbers are not part of the statewide report. However, an update provided by Palm Beach County Bar Association showed that of 41 mediations that had occurred as of early last month, 10 resulted in a settlement that avoided foreclosure.

Although the data on statewide mediation is not complete, attorneys said there is enough evidence to show the program is struggling.

Of 13,417 cases referred to mediation between March and June, 768 ended with the borrower and bank coming to an agreement. An agreement could include the homeowner agreeing to surrender the property instead of going through foreclosure, a short sale or a loan modification.

“If success is measured on the basis of providing significant financial relief to borrowers, then it has not accomplished that goal overall,” said Michael Gelfand, a licensed mediator and an attorney with Gelfand & Arpe, P.A., in West Palm Beach. “If success is measured in terms of moving cases forward, it’s probably a C-minus.”

One hurdle facing the mediation program is the difficulty in contacting borrowers.

Wednesday’s report shows that homeowners were reached in 44 percent of the cases referred to mediation. Of those contacted, about 38 percent attended a session.

“It’s not always someone ignoring us, it’s just getting them the information and helping them realize we’re not just some company out there to scam them,” said Michael Napoleone, president of the Palm Beach County Bar Association, which oversees Palm Beach County’s mediation program.

Once a homeowner got to mediation, 34 percent walked away with a resolution.

The bank is required to pay for the mediation — a $750 fee per case — and the homeowner must go to foreclosure counseling before the meeting. The mediation must be scheduled between 60 and 120 days from when a foreclosure suit is filed.

In some instances, attorneys said, homeowners don’t want mediation because they have to divulge financial information. If mediation fails, the bank then has a road map to a borrower’s finances.

Lenders too shoulder some of the blame for mediation failures, Gelfand said.

They come to meetings without the appropriate paperwork, no authority to modify a mortgage, or little willingness to write down the principal amount of a loan, Gelfand said.

Fifth District Court of Appeal Judge William Palmer, who is chairman of the Florida Supreme Court Committee on Alternative Dispute Resolution Rules and Policy, compiled the program report.

He said it is too early to judge success or failure and recommends giving it more time before reevaluating.

“Even though the numbers show few were able to come to an agreement, it’s still a valuable program because the homeowners have an opportunity to sit down face to face with the bank and tell their story,” agreed Jeffrey A. Kasky, an attorney and residential mortgage foreclosure mediator with Foreclosure Mediation Solutions in Fort Lauderdale. “If it doesn’t work out, at least they know they got their shot.”


9 Responses

  1. Neil,

    Would like to present this perspective which I do not think anyone has brought up. That of the 2nd lien on properties.

    While the first lien which was securitized or supposed to be securitized will prove out to be an unsecured loan. However, the 2nd loans which were not sold off to investors remain on the balance sheet and are indeed owned by the banks.

    Many times the servicer of the first mortgage such as country wide did the second mortgage. While the first as i said is sold off, the second remains with now BOA.

    And in the end, while the first has no standing as being secured by the property, the second will then become the first and they will be entitled to all late payments etc. in that there will now be equity in the house.

    Furthermore, do you think it is possible that the banks (the servicer) do not want to foreclose on the first so that down the line the second can be and will be forced to be paid in full making the banks mostly whole. In the end, it will be the investors (ie. pension funds etc. ) who take the losses and not the banks.

    what is your take.



  2. meant “going on”


  3. indio007

    No one should be modifying. Know people are desperate to save their home. But modifications are fraudulent because they are not signed with actual creditor — and because all legal rights are SIGNED AWAY.

    But, government is fixated upon this. It is time for those in control — to spill the beans. Modifications are destroying mortgage title. First, modifications are done on loans that are NO longer a mortgage — but just a default debt – not secured by any – now non-existent – mortgage loan contract. Second, modifications have a false creditor (to the the default debt) named.

    US Government — what the heck are you doing??

    Time to regulate — those that have been deregulated. But, before we do that — need criminal investigation for false foreclosures, false (modification) contracts,. fraud, fraud, and more fraud.

    2011 will be better — for us — because there are so many here that know — what has/is really gone.

    We will prevail..

  4. This is insultin and amounts to a confession of debt and a waiver of any defense.

    “Even though the numbers show few were able to come to an agreement, it’s still a valuable program because the homeowners have an opportunity to sit down face to face with the bank and tell their story,”

    Ya great let me go confess to the bank , give them all the evidence they need to prove a debt by parole. The law always considers the actions of the parties.
    All this does is provide ammo for the enemy.
    But I’ll get to tell my story! What a relief ! I get to vent!

  5. Neil

    You are 100% correct – “The mediation program can’t work. If you have one real person on one side and Donald Duck on the other, nothing but a fictional characterization of mediation is happening

    Dont Moderate (EDIT) Me Dude,

    This is because the Donald Ducks fund the politicians’ campaigns. .

  6. Here’s hoping for a full foreclosure moratorium in 2011. Remember everybody, the mortgage servicer does NOT hold/own the loan. Some poor schmuck investor does–or several investors would be more correct. Actually, several investors own parts of your house, and the house has already been paid for by those investors. If you sue the bank or pretender lender, make sure you retain your rights when they settle. Those rights would include the right to cancel the foreclosure action if one is in place and, also, maintain the right to sue then later when they breach the contract/loan mod. http://www.challengingforeclosure.com Sirak@challengingforeclosure.com

  7. No one is reporting on statistics in Maryland, but as soon as “mediation” became law there were local politicians who immediately said it would only “delay the inevitable”.

  8. Florida resident here- the mediation program is mandatory, but many foreclosure mills abuse the system and or ignore it and have to be forced. Also, it puts Pro Se’s in a very bad position, as the Pro Se Defendant is forced to show there hand and allow the Foreclosure Mills to custom design its foreclosure filing.

    This is just insane. EVEN if the borrowers borrowed more than they could afford; NONE of us expected to loose 50% of our value or more…$410,000 value in 2006 to now $80,000 and no one can earn a living.


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