Homeowners facing foreclosure in Miami and South Florida are getting new help from the Courts. In a pilot program, borrowers seeking a loan modification, short sale, short payoffs or graceful exit can negotiate with their lender in mediation before a foreclosure can proceed. The program has already helped hundreds of homeowners save their homes from foreclosure.
The Florida Supreme Court’s special task force on residential foreclosures recommends mandatory mediation to ease the crisis overwhelming Miami and South Florida courts. The plan is to force mediation on primary homes so homeowners can negotiate loan modifications and expedite foreclosures of vacant and abandoned properties
Miami-Dade Circuit Court Judge Jennifer Bailey chairs the 15-member residential foreclosure task force which suggests dividing foreclosure cases into three categories: primary homes, also known as homesteads; vacant and abandoned properties; and all others.
Almost half of all South Florida homeowners are underwater on their home. This means they owe more to their mortgage lender than their house is worth. With unemployment rising and foreclosure filings skyrocketing over the past three years, help is sorely needed. Miami-Dade County has seen 29,618 foreclosure cases filed since May, 2009, and Broward has seen 22,306.
While mandatory mediation will be a godsend to homeowners, Lenders are not as happy. The program is considered to costly and will delay foreclosure cases. Especially for those borrowers who may have already been considered and denied help. The plan calls for the lender to bear most of the cost of this mandatory mediation program.
Mandatory mortgage mediation will force the lender to meet with the homeowner, and their counsel, to discuss various settlement proposals. This will avoid one of the biggest problems with loan modifications – Banks and lenders cannot keep up with the demand. Endless waiting on hold and confusing, contradictory procedures make the process frustrating and inefficient. Sitting down with a mediator and your attorney can mean all the difference in avoiding the worst-case scenarios in a foreclosure.