Tuesday, December 29, 2009

Florida Supreme Court Orders Mediation in Foreclosure Cases!

Citing very bleak statistics about the impact of the mortgage foreclosure crisis on our State, the Florida Supreme Court has issued Administrative Order No. AOSC09-54 in accordance with the recommendations made by Florida's Task Force on Residential Mortgage Foreclosure Cases. The 15-member Task Force was established to respond to the growing foreclosure crisis in Florida. The Task Force issued its Final Report and Recommendations on August 15, 2009.

Key among those recommendations was the establishment of a uniform, statewide managed mediation program wherein all foreclosure cases in the state courts which involve residential homestead property with loans that originated under federal truth in lending regulations will be referred to mediation unless the borrower and the plaintiff (bank) agree otherwise or unless acceptable pre-suit mediation has already been conducted.

Of course, there is always the sticky issue of getting enough qualified mediators to hear all these cases and people willing to go this route. What exactly does this mean for struggling associations? It might very well mean that already slow bank foreclosures will take even longer once pre-suit mediation is required.

The Supreme Court's rationale is that our court system is simply not prepared to deal with the onslaught of foreclosure cases it has seen over the last year and promises to continue seeing in 2010 but one has to wonder if this is a case of "passing the buck" rather than solving the problem in a meaningful way. The Task Force's stated goal is that forced mediation will force banks and their borrowers to communicate early in the process before expending too much of the courts' resources. If the threat of losing your home isn't enough to loosen tongues, one has to question how much additional months of forced mediation will!

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