On Monday, Florida Supreme Court Justice Charles Canady issued an Order terminating the state’s mandatory foreclosure program. Citing the program’s abysmal success rate, Justice Canady wrote that the state “cannot justify the continuation of the program.”
The mandatory mediation program was introduced in 2009 to help alleviate the backlog of foreclosure cases piling up in the state. While the program was intentionally created to provide a forum for borrowers and lenders to communicate, participants reported a number of problems with the process that left both banks and owners disgruntled. Since its inception, only 3.6% of eligible cases resulted in revised mortgage agreements. The Office of the State Administrator reports that from March 2010 to March 2011, almost 67% of mediated cases failed to produce any agreement between the lender and borrower.
Although homeowners who are currently scheduled for mediation remain eligible to complete the program, no new mediations will be available for homeowner defendants. Also, the end of state-mandated foreclosure mediation will not require local mediation programs to stop. Some local courts have established programs to address the foreclosure crisis with greater success.
Click here to read a copy of the Order.
Author(s): Brooke P. Dolara