Mediation And Florida Foreclosure Defense

Despite the Florida Supreme Court’s termination of the Managed Mediation Program for Residential Mortgage Foreclosure Cases in December 2011, homeowners and foreclosure defense attorneys can still use mediation as a tool to help save homes.  foreclosure mediation is a process by which the parties of a lawsuit meet with a third party, called the mediator, and try to resolve the case without court intervention.  Mediation is completely confidential and anything discussed or settlement offers made remain between the parties and their lawyers and are not shared with judge.

In 2009, as an attempt to address the overwhelming number of foreclosure cases being filed in Florida, the Florida Supreme Court mandated that every borrower had the right to force lenders to mediate their case at no cost to the borrower.  unfortunately, the program did not work, as banks were under no obligation to truly work with borrowers and most borrowers did not understand the mediation process.  Although the free mediation program is no longer available, mediation is still a valuable tool used by attorneys in foreclosure cases.

Judges in Florida are empowered to direct foreclosure cases to mediation on a case-by-case basis pursuant to 44.102, Florida Statues, and Florida Rule of Civil Procedure 1.700(a). So what does this mean?  It means that you can still request that the judge send your case to mediation and, in most cases, the court will grant your motion; especially if there is a reasonable chance you can save your home.  The bad news is that it also means you will likely be responsible for paying half of the mediator’s fee, which will generally be between $150 and $250 per hour, in addition to additional fees you may incur from your foreclosure defense lawyer.

If you do request that your case be referred to mediation, it is important to understand that the bank is under no obligation to settle on terms you find acceptable.  In fact, the bank’s only obligation at mediation is to have a representative present with the authority to settle the case.  They do not have to refinance your loan, change your interest rate or forgive past due payments.  In other words, if you want to save your home from foreclosure, you must convince the bank that it is in their best financial interest to refinance your mortgage.

Banks are in the business of lending money in exchange for your promise to pay them back, plus interest.  They do not want your house and, in today’s market, know that in many cases, your home cannot be sold for what you owe.  Despite knowing that your home is “upside down,” it does not make business sense for a bank to refinance your mortgage and offer you lower payments if you cannot reasonably make those payments.  This would expose the bank to the expense of a second foreclosure action and the potential devaluation of their collateral; your home.  If you are cash strapped by a mortgage, and have no disposable income, you will not be able to provide upkeep for the home, resulting in its devaluation.  Also, many mortgages were bundled into investment portfolios held around the world, making it very difficult for mortgage servicing agents such as Bank of America or Wells Fargo to legally renegotiate its terms.

Mediation can be used as a valuable tool to help organize your finances and convince your lender that you have steady employment, the income to pay your mortgage, disposable income to care for your home and, in some cases, a co-signer for a new mortgage.

In addition to mediation, it is strongly recommended that you attempt to negotiate with the bank outside of your foreclosure case and attempt to refinance your home.  Nothing will stop you from negotiating with the bank even after you have been sued for foreclosure and have hired an attorney.  In fact, lawyers hired by the bank to foreclose on your home often have no power to renegotiate the terms of your mortgage and do not always communicate with the people at the bank who do.  Do not solely rely on the legal system to get the result you are looking for; you may have to do some legwork yourself to keep your home.

If you have questions about the foreclosures, mediation or any other legal matter, please contact Matthew C. Bothwell, P.A. and let us help solve your legal issues before they become problems.