A new report shows that the Florida Supreme Court's foreclosure mediation program has had little success in helping Florida residents stay in their houses. The Office of the State Courts Administrator compiled the report. According to the Sun Sentinel, the State Supreme Court made mediation mandatory in 2009, but between March and November 2010, only about 4 percent of foreclosure cases referred to mediation ended up with a settlement between homeowners and banks moving to foreclose on their homes.
The main problem is that mediations are not happening for cases that are referred to the process. According to the Sun Sentinel, of the cases that actually make it through mediation, the rate of an agreement being reached between banks and homeowners is around 27 percent. Lenders say it is hard to reach borrowers by phone or have them respond by mail. Homeowners in foreclosure may have their phone service shut off and their letters about mediation may be lost in all their foreclosure-related mail.
The idea behind the mediation program was to help people in Florida to reach agreements with lenders in order to stay in their homes or reach a settlement around a loan modification, short sale or deed-in-lieu of foreclosure. Lenders pay for the mediation, which costs $750. Some homeowners do not want to go through the process of mediation or the paperwork they have to supply or foreclosure counseling because they may feel that foreclosure is their best or only option.
Banks have also presented obstacles to success through the foreclosure mediation program. Sometimes lenders showed up to the mediation sessions without the required paperwork or without the ability to negotiate a settlement.
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