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Florida Supreme Court Requires Mediation and Counseling for Residential Foreclosures

December 31, 2009

Our Moreno Valley loan modification attorneys wrote last month about foreclosure mediation efforts in Philadelphia and Nevada. These programs, in effect in about 14 states, have shown early promise at helping prevent foreclosures that could be avoided by taking a close look at the homeowner's finances. The state of Florida has been testing the foreclosure mediation process in two of its 20 judicial circuits, and on Monday, the Florida Supreme Court announced plans to make it universal. Citing a glut of foreclosures clogging the courts, Florida Chief Justice Peggy Quince ordered all state courts to shift foreclosure cases into mandatory mediation. In doing so, Quince followed a recommendation made in August by a state task force asked to study the problem, the Miami Herald reported Dec. 28.

Another Dec. 28 report, by the St. Petersburg Times, detailed how Florida's mediation program is expected to work. Mediators are trained third parties from nonprofit organizations, who help the lender and borrower try to reach an agreement. Only borrowers with homesteaded properties are eligible. The mediations will be conducted in single sessions of about three hours and cost $750. Lenders will pay the fee, but can claim it back if the mediation fails and the home goes into foreclosure. Happily, however, preliminary results show that mediation is successful more often than not, with 65% of participating borrowers ending up with a loan modification. Homeowners start the process by attending a mandatory counseling session that explains the process. A mediation session is then scheduled for 60 to 120 days after a foreclosure case is filed.

As San Bernardino loan modification lawyers, we will be very interested to see how this program works out. Florida resembles California in several ways, not least because both are hard-hit by the real estate downturn and facing a high rate of foreclosures. If this program helps stop foreclosures in Florida, it may be useful in our state as well. It is clear from lenders' actions in the past year or two that voluntary loan modification programs are not enough to stop foreclosures. Lenders say they're willing to make loan modifications, but continually lose paperwork, ignore phone calls and letters and otherwise delay real action. Making it mandatory to try to strike a deal can at least require lenders to show up for negotiations. And if the 65% figure is an indication, just showing up substantially improves results for borrowers who might otherwise lose their homes.

Howard Law LLP has an active practice helping homeowners in California win changes to their mortgage loans. Since the housing downturn began, we have been on the front lines with our clients, helping negotiate aggressively with lenders and loan servicers. We have been able to help even those clients who spent months trying unsuccessfully to win a loan modification on their own, a success we attribute to the fact that we are Oceanside loan modification attorneys. When lawyers, call, banks listen because they know a lawsuit may be coming soon. In fact, we are more than happy to sue banks whenever necessary to stop unfair foreclosures or correct a situation created by predatory lending practices.

If you've been trying for months to get a loan modification, only to be met with delays and excuses by your lender, you should call Howard Law for help. For a free consultation where you can learn more about your options, please call us toll-free today at 1-800-872-5925 or send us a message online.