FLORIDA’S HIGH COURT TO REQUIRE MEDIATION
The Florida Supreme Court has weighed in on the foreclosure issue facing Florida --- mediate all foreclosures involving a primary residence.
Chief Justice Writes the Order
Written by Chief Justice Peggy Quince, the order includes, “Florida has the third highest mortgage delinquency rate, the worst foreclosure inventory, and the most foreclosure starts in the nation. The crisis continues unabated.”
This administrative directive echoes the recommendation made to it by the Court’s Florida Task Force on Residential Mortgage Foreclosure Cases last August. According to the Court’s order, the task force identified the lack of communication between plaintiffs and borrowers as the most significant issue preventing resolution. It also stated that case management and mediation would be the best methods to ensure communication between both sides began early enough in the process.
Several counties in Central Florida had already begun to implement a similar requirement for the same reasons - the courts are simply unable to properly handle the crushing backlog.
What It Requires
The Court’s order directs that a third party “managed mediation” take place between the lender and borrower unless both borrower and lender opt out. The cost is not to exceed $750 and be provided by a non profit organization with mediators specially trained and court certified in mortgage foreclosure matters. The fee is to be initially paid by the lender; with some of it perhaps being recoverable in a foreclosure action should the mediation fail.
The Court Will Not Act Without Mediation
It is significant to note that Chief Justice Quince has stated that no action will be taken by the court to set any final hearings or enter summary or default final judgments until the requirements of the program have been met.
It is expected that reactions will be mixed. Advocates for borrowers see this as a firm directive that lenders try to negotiate with borrowers, while lenders have been outspoken against just such an action claiming it would cause even more delays since lenders already communicate with borrowers regularly before filing a foreclosure. Some question such a directive being within a court’s role.
The mediation order will be carried out via the chief judges in Florida’s 20 judicial circuits and should be in place by mid-February.
Primary Residential Only
The order makes no mention of second homes, investment property or commercial holdings.
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