Mediation Touted As a Key to Stopping Miami Foreclosures, But It Rarely Works

August 7, 2011

Fourteen states now have mediation programs in place, a U.S. Department of Justice report states, but they are rarely used, as banks would prefer to forge ahead with a foreclosure than take the time to work with homeowners, an article published on MSNBC.com reports.

Miami Foreclosure Defense Attorneys have seen that mediation programs typically don't work. In 2009, the Florida Supreme Court ordered that all foreclosure cases in state courts that involve residential homestead property must be sent to mediation, unless there is an agreement between the homeowner and lender. It's called the Statewide Managed Mediation Program. Under the program, however, the homeowner can opt out, but the lender must pay for the costs of mediation.
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The purpose of the program was to ease the burden of the courts by trying to get many of the hundreds of thousands of foreclosure cases (there were 369,000 in December 2008 and 456,000 by the end of 2009, the state's high court wrote) out of the system. But the program has no mandatory elements, meaning that those who are fighting foreclosure in Miami and throughout Florida may go into mediation and come out with no resolution.

Florida, much like in Maryland, where the story is based, has a program that has done little good. In Maryland as of May 31, only 56 homeowners had gotten a modification of their home loan. Most borrowers complain that lenders would prefer to foreclose on their house than negotiate. One woman's house was sold in the midst of the mediation process there, the article states.

The article is based in Prince George, Maryland, the country's richest majority-black city. According to statistics there, after a slow down in the foreclosure process nationwide, more than 7,100 notices of foreclosure were filed in March alone, more than twice as many as had been filed in any month since 2008.

Many experts believe that the slowdown in foreclosures came as banks and lenders were dealing with accusations of "robo-signing" and filing false documents in foreclosure proceedings across the country. Mortgage servicers -- companies hired to process documents for the banks -- were forging the signatures of bank officials in order to quickly pass through documents to the court, leaving many inaccurate, yet "signed" by a person who should have actually taken the time to verify correct information.

The banks have also dealt with the struggles of MERS -- Mortgage Electronic Registration Systems -- a system created by lenders in the mid 1990s to more quickly keep track of purchases and sales of homes than county clerks of court. But the shoddy filings have caused problems today, as many banks haven't been able to properly foreclose on a homeowner's property because the information wasn't cataloged correctly into MERS.

Aside from the shoddy practices of banks, the article goes on to highlight the stories of several Maryland homeowners, who have gotten very little help from the banks. They tell of bank representatives who simply use mediation as a "formality" before moving on to foreclosure. Some homeowners have tried desperately to stay in their homes, only to have lenders rebuke those efforts and move on with foreclosure.

The same thing is happening in Miami and throughout South Florida. If you want to fight back against foreclosure, meeting with an experienced Miami Foreclosure Defense Lawyer should be your first step.

If you're battling foreclosure in Miami or the surrounding areas, contact Jacobs|Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991.

More Blog Entries:

Great Depression Provides Lessons for Miami Mortgage Foreclosures: May 17, 2011

Feds Continue To Blow the Whistle on Banks in Miami Foreclosure Cases: July 15, 2011

Additional Resources:

Mediation efforts fail to stem foreclosure tide, by Kat Aaron and Mary Kane, American University Investigative Reporting Workshop