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Jan 19, 2012

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Broward Courts Considering Changes to Residential Foreclosure Mediation Program

I was honored to co-moderate last night’s Foreclosure Crisis Committee which was held by the Broward County Bar Association’s Real Property Section.

I previously blogged here about the Florida Supreme Court’s termination of the statewide mandatory mediation program for residential foreclosures.  The new Administrative Order provides that circuit chief judges of each circuit may “adopt or employ any measures permitted by statute or court rule to manage pending and new residential mortgage foreclosure cases, including referral of cases to mediation on a case-by-case basis pursuant to section 44.102, Florida Statues, and Florida Rule of Civil Procedure 1.700(a).”

Broward County’s Chief Judge (Hon. Peter Weinstein), the Administrative Civil Judge (Hon. Jack Tutor), and the Foreclosure Division Judge (Hon. Marina Garcia-Wood) are considering different options for a new foreclosure mediation program.  To their credit, they were open to hearing recommendations from the various participants in the foreclosure mediation process before making a final decision.

The BCBA’s Real Property Section invited Judge Garcia-Wood and a cross-section of plaintiff and defense foreclosure attorneys, HOA/condo attorneys, and mediators to discuss the problems with the RMFM mediation program and suggestions to improve the foreclosure mediation process.  Following introductory comments by each attendee, the different groups met separately and discussed mediation issues from their perspective and offered a series of suggestions to improve the process.   Some excellent ideas were exchanged, and there was actually quite a bit of common ground among the various participants.  Judge Garcia-Wood appreciated the suggestions and is going to factor them into the decision making process for the new mediation program.

Special thanks to Gary M. Singer, Esq. (BCBA Real Property Section Chair) for inviting me to co-moderate the event with him.

I will post an update on this blog when the Seventeenth Judicial Circuit implements the new foreclosure mediation Administrative Order.

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Dec 21, 2011

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Florida Ends Statewide Residential Mortgage Foreclosure Managed Mediation (RMFM) Program

Florida’s residential mortgage foreclosure managed mediation (RMFM) program is dead. Administrative Order No. AOSC11-44, signed yesterday by Florida Supreme Court Chief Justice Charles Canady, terminates the statewide mediation program.

 The Court has reviewed the reports on the program and determined it cannot justify continuation of the program. Accordingly, upon issuance of this administrative order, the statewide managed mediation program is terminated. Cases already referred to and pending in a mediation program on the date of this order pursuant to the statewide managed mediation program will remain in the program through completion of mediation. After the date of this order, no new cases may be referred to mediation pursuant to the statewide managed mediation program.

The end of the program was not a big surprise to anyone who has been following this issue.  The Court’s decision follows a panel recommendation from October that Florida’s twenty judicial circuits should be allowed to set up local mediation programs.  I wrote about the panel’s report and recommendations here.

Where do we go from here?  That depends on each circuit’s chief judge.  The Administrative Order provides that circuit chief judges may “adopt or employ any measures permitted by statute or court rule to manage pending and new residential mortgage foreclosure cases, including referral of cases to mediation on a case-by-case basis pursuant to section 44.102, Florida Statues, and Florida Rule of Civil Procedure 1.700(a).”

It remains to be seen how each circuit is going to react.  The logical question is whether circuit-by-circuit will be any more effective than mediations under the statewide program.  Unless those programs address the root causes in failed mediations under the statewide program, I don’t expect to the see the dismal mediation success rate improve much.

Don’t forget to check back to our blog for more information.  We also post a lot of information on our firm’s Facebook page, so don’t forget to “like” our page.

If you’re interested in Florida foreclosure issues, I also encourage you to check out the Palm Beach Post which continues to do an excellent job covering Florida’s foreclosure crisis. Here’s a link to the Post’s article regarding the end of the RMFM program.

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Nov 03

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Report Issued by Statewide Managed Mediation Program Assessment Workgroup

Mediation Photograph
Mediation

In an earlier blog, I wrote about the Florida Supreme Court’s appointment of a “Statewide Managed Mediation Program Assessment Workgroup” to examine the statewide residential foreclosure managed mediation program data.  The Workgroup recently submitted its report to the Supreme Court.  You can obtain a copy of the report here.  The report is worth reading in its entirety, but I will touch on a few key points.

After consideration of the available program data, public comments, chief judge input, and other information, the workgroup voted to: (1) eliminate the mandate for a statewide managed mediation program; and (2) allow circuits to opt in to a new, revised uniform model administrative order, either as an exclusive approach or in addition to referral of cases to mediation on a case-by-case basis under relevant court rules and statutes.  The workgroup concluded that for those circuits that choose to continue a managed mediation program, adherence to a modified model administrative order is important to maintain consistency throughout the state. In those circuits that choose not to opt in to a modified model administrative order, the chief judge should be responsible for devising a plan for discontinuing the local managed mediation program.

The workgroup recommends that the Supreme Court establish a separate workgroup to develop modifications to the order, including the following:

• Require borrowers to affirmatively opt in to the program upon service of suit papers

• Develop steps to improve the integrity of borrowers’ financial information and to identify the appropriate lender contact

• Develop steps to improve performance on document exchange and document review

• Review and update document exchange requirements for both parties

• Clarify the correlation between bankruptcy and participation in the program

• Explore options for sanctions for noncompliance by either party

• Explore fee reductions, including borrower contributions to fees, borrower payment of foreclosure counseling fees, and reduction of overall program costs

• Develop data mechanisms to track post-mediation settlements

• Shorten the time frame for completion of mediation

• Eliminate the mandate for referral of all residential mortgage foreclosure cases to the program.

• Examine the manner in which the results of mediation are reported

Interestingly, the Report states anecdotal evidence suggests that the percentage of foreclosure cases resulting in settlement would “materially” increase if data could be obtained for cases at which an impasse is declared at mediation. Later, the Report states that other features of the managed mediation program explain why a “significant” number of cases settle after impasse is declared at mediation. That is not consistent with the anecdotal evidence I have heard, but I also recognize that most of what I have heard comes from the 17th Judicial Circuit in Broward County.

It should come as no surprise that the comments from the plaintiffs’ lawyers are mostly in favor of ending the mandatory mediation program. Conversely, the comments from mediators and defense lawyers are overwhelmingly in favor of continuing the mediation programs.

A more successful mediation program would benefit both homeowners and lenders, but it remains to be seen whether the suggested changes will actually translate into positive results.

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Sep 28, 2011

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Do Mandatory Mediations Work in Florida Foreclosure Cases?

Do mandatory mediations work in Florida foreclosure cases?  That’s the question being asked by the Florida Supreme Court.  The Court is seeking your input, but you only have until October 3rd to send in your comments.

Earlier this week, the Florida Supreme Court released Administrative Order SC11-33.  In its Administrative Order, the Florida Supreme Court noted that more than one year of data has been collected on the statewide managed mediation program for residential foreclosures, and the Court wants to examine whether the mediations are effective.

The Court appointed a “Statewide Managed Mediation Program Assessment Workgroup” (the “Workgroup”) comprised of five judges and one court administrator, to examine the program data, consider other relevant information including the reduction in the backlog of foreclosure cases by other means, and make recommendations to the Court regarding the continuation, modification, or elimination of the statewide program.

Specifically, the Workgroup is charged with addressing the following two issues:

  1. Assess the success of the statewide managed mediation program in resolving cases as evidenced by data collected to date, as well as any other relevant information, including current foreclosure filings and other measures that have been taken to reduce the backlog of residential mortgage foreclosure cases, and make recommendations to continue, modify, or eliminate the statewide program; and
  1. Recommend steps to be taken to manage pending and new residential foreclosure cases if the mandate for managed mediation in these cases is eliminated.

Comments from interested persons concerning these two issues only may be submitted to the Workgroup.  You must use the form located here.  Interested persons must electronically submit the comment form by October 3, 2011. Here is the e-mail link, but don’t forget that it is mandatory that you submit your comments using the approved form which you can get here. No comments will be accepted in any other format, or after October 3, 2011.  The Workgroup will present its report to the Florida Supreme Court by the end of October.

Although the mandatory mediations sounds like a great idea on paper, the results have been less than impressive.  The Palm Beach Post reported this week that only 3.6 percent of all cases referred to mediation statewide in a yearlong period ended in a written agreement between the lender and homeowner.  In Palm Beach County, the success rate is even lower – only 1.6 percent of the 4,632 referrals made ended in a written agreement.  Both sides in the foreclosure cases blame the other for the low success rate at mediation.  Regardless of the cause, this preliminary data suggests that the managed mediation program should be significantly retooled or dropped entirely.

Lawyers and litigants on both sides of foreclosure cases will be watching to see if there will be any statewide changes as a result of the Workgroup’s examination and report.  Check back here at the end of October for an update after the Workgroup submits its report to the Florida Supreme Court.

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