Sarasota Real Estate Market News

Florida foreclosure mediation not working, needs changes

TALLAHASSEE, Fla. – Oct. 24, 2011 – A statewide program established in 2009 requires mediation in residential foreclosure cases, but it doesn’t work and should be significantly changed, a Florida Supreme Court panel said Friday. The report also warns of another deluge of foreclosure cases.

Following a series of conference calls and based on a review of public comments, a work group led by Second District Court of Appeal Judge William Palmer called on the state high court to eliminate the foreclosure mediation requirement. Chief Justice Charles Canady had asked the work group to conduct the study.

The work group also said the chief justices in Florida’s 19 judicial circuits should be given more flexibility to modify the proceedings to meet their particular needs.

The report says that the mediation process, established by 2009 Chief Justice Peggy Quince in response to a backlog of foreclosures, is not well known and apparently doesn’t provide the proper incentives to push borrowers and troubled mortgage holders to settle. As a result, it doesn’t solve the foreclosure backlog problem it was created to address.

“There are now approximately 350,000 backlogged foreclosure cases in the circuit courts,” Palmer wrote. “… These cases will continue to languish if additional resources are not provided to the courts.”

The work group said that the foreclosure process is working in some judicial circuits, and they should be allowed to continue their efforts. The work group urged the high court to make the process more attractive to the parties involved and remove a requirement that all cases must go through mediation.

The group said improvements need to be made quickly because the problem is not going away.

Florida had one of every nine U.S. foreclosure filings in third quarter 2011, according to RealtyTrac. The quarterly increase was prompted by a 24 percent increase in new default notices.

“Circuit courts likely will face a new surge of cases in 2012, which will further exacerbate the backlog and further delay finality,” Palmer concluded in the report.

The group said it did not have enough time to come up with specific remedies to the existing mediation program. Instead, it mapped out a series of issues that should be addressed by another group that has more time to review data from the fledgling program.

“Florida’s economy will continue to be depressed as long as there are massive numbers of mortgages in default that have not been resolved by foreclosure,” Palmer said.

Source: News Service of Florida, Michael Peltier

October 27, 2011 - Posted by | News related to Short Sales and Foreclosures

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