Kimberly Miller, Palm Beach Post
Palm Beach County Chief Judge Peter Blanc said weeding out borrowers who have abandoned their homes and enforcing a “good faith” requirement on lenders may improve a foundering statewide foreclosure mediation program.
Last week, a judicial committee recommended the mandatory program be eliminated, suggesting instead that each of the 20 circuit courts be allowed to opt-in to a newly created uniform plan.
While Florida’s Supreme Court justices mull the advice to end their once-heralded 2009 program, chief judges statewide find the ball may soon be in their court as to how to handle foreclosure mediation in the face of bank resistance and weak homeowner participation.
“I agree the process can be approved, as can just about any process,” said Blanc, whose 15th Circuit Court has a backlog of about 23,700 foreclosure cases in Palm Beach County. “It also seems to me that we should spend some time trying to address some of the factors mentioned that can have a negative impact on the mediation success rate.”
The report noted several reasons mandatory mediation has not lived up to expectations, including lenders’ failure to send representatives with full authority to negotiate a settlement and a refusal to consider more than a narrow range of settlement options.
Another concern is that borrowers under siege by companies offering foreclosure prevention assistance were uncertain of the legitimacy of the court-ordered program and didn’t respond to invitations to participate.
Just 14 percent of all eligible borrowers participated in mediation.
Banks pay up to $400 per case for mediation managers to locate borrowers and have them participate in financial counseling – a requirement under the program. Another $350 is paid by lenders to complete mediation.
