The state of Florida recently created a foreclosure mediation program has had little success so far. The program was meant to bring homeowners and lenders together in order to reach an agreement that would allow homeowners to stay in their homes. By coming to an agreement outside of the court room, the goal of mediation was to lighten case loads and help local homeowners. Florida continues to have higher foreclosure rates than most of the nation. This mediation should have allowed some homeowners to refinance or apply for loan modifications in order to avoid short sales or foreclosures. The first report on the success of the program was recently released and reports that only a tiny percent of meetings helped homeowners stay in their homes and keep more homes from hitting an already over saturated market. One southern Florida bankruptcy judge insists the mediation program is not helping homeowners at all and has had no affect on the number of cases coming into bankruptcy court. Only about five percent of the cases that were sent to mediation resulted in an agreement between the two parties. In fact, most of the time the cases that were referred to mediation never actually met.
Miami had the highest rate of mediation in Florida, but still only half of the cases sent for mediation happened, and less than five percent of that half actually reached an agreement. Agreements might also include short sales or deed in lieu, which does not keep Floridians in their homes, one of the original purposes of the program. There are several factors keeping the program from being successful. First, reaching homeowners who are already overwhelmed with creditors and are likely ignoring any attempts to contact them. Homeowners must be willing to go to counseling and bring financial documents to the meeting and many refuse. Some homeowners realize they simply cannot afford their homes any more and have given up. Banks are also part of the problem. There are reports that lenders show up to mediation meetings completely unprepared and banks send people without the authority to approve an agreement with homeowners. Unfortunately, there is no system set in place to penalize lenders.
Besides both lenders and homeowners not taking mediation seriously, there are other reasons why mediation is not working. Banks simply do not care about homeowners. They look at the numbers and not the people. Hiring a Miami foreclosure lawyer is a much more effective way to force your bank to work with you. The majority of homeowners do not know the laws or the system. Lenders know that. A Miami foreclosure lawyer, on the other hand, does. Banks are far more likely to take you seriously when you have a Miami foreclosure lawyer representing you. They know they need to make sure all of their paper work is correct and that they follow the law when and if they file. While mediation is a great idea in theory, it is not working out in practice. In the state of Florida, foreclosures must go through the court system, hiring a Miami foreclosure lawyer will protect your rights in court.
Slow start for Florida’s foreclosure mediation program, by The Miami Herald, April 27th 2011