Friday, December 23, 2011
Florida Terminates Foreclosure Mediation Program
Florida Supreme Court Chief Justice Charles Canady terminated the mandatory foreclosure mediation program on December 19th, 2011. “The program was established as a means for the court system to address the overwhelming number of mortgage foreclosure cases coming into the system. The Court has reviewed the reports on the program and determined it cannot justify continuation of the program. Accordingly, … the statewide managed mediation program is terminated,” wrote Canady.
In Administrative Order 2009-065, the state of Florida updated various foreclosure procedures and forms to implement a mandatory mediation program for homeowners whose primary residences were in foreclosure. The Administrative Order was meant to address the increased volume of mortgage foreclosure cases throughout Florida.
Mediation, a form of alternative dispute resolution (ADR), is typically a cost efficient way for adverse parties to resolve their disagreements without resulting to prolonged litigation. The mandatory mediation program had its benefits: the lender was responsible for paying the fees for the mediation and, ideally, the mediation would result in a settlement or modification that would stop foreclosure. The mediations that occurred under the statewide managed mediation program were resulting in a “no compromise” in over seventy percent of cases. This left the majority of participants in foreclosure without any resolution – the exact opposite result of the program’s intention.
With the ruling by the Florida Supreme Court, it will once again be left up to the discretion of local state judges to determine whether mediation will be a beneficial and cost efficient way to solve a foreclosure case.