In December of 2009, the Florida Supreme Court instructed the state’s circuit courts to implement a statewide uniform foreclosure mediation program. However, on December 19, 2011, the program was terminated. However, some circuits still offer foreclosure mediation. Read on to learn more about what happened to this program and what mediation options remain available if you are currently facing foreclosure in Florida.
(To learn about other options for dealing with foreclosure, visit Nolo's Foreclosure section.)
What is Foreclosure Mediation?
Foreclosure mediation is a process that is used to help homeowners avoid foreclosure by coming up with an alternate solution that benefits both the homeowners and the lender. Mediation consists of a meeting between:
- the homeowners
- their lender, and
- an impartial third-party (the mediator).
At the meeting, the parties discuss the homeowners’ financial situation and try to negotiate a way for the homeowners to keep the home or give up the property without going through a foreclosure. By working together, the parties are often able to reach an agreement.
Potential outcomes of mediation include:
- loan modification
- repayment agreement
- forbearance agreement
- short sale
- deed in lieu of foreclosure.
(To get information about each of these options, see our Alternatives to Foreclosure area.)
Florida Foreclosure Process
In Florida, foreclosures are judicial, which means the lender must file a lawsuit in state court. The lender initiates the foreclosure by filing a complaint and having it served on the borrower, along with a summons to appear in court. Learn more about the Florida foreclosure process.
(To learn more about the difference between judicial and nonjudicial foreclosure, and the procedures for each, see Will Your Foreclosure Take Place In or Out of Court?)
History of Florida’s Statewide Foreclosure Mediation Program
In December of 2009, the Florida Supreme Court instructed the state’s circuit courts to implement a uniform foreclosure mediation program for all residential foreclosures filed against homestead residences. Each judicial circuit contracted with a private non-profit organization to manage the mediations and the circuits began implementing the programs in 2010.
Florida’s statewide program required that the mediation manager schedule a mediation session no earlier than 60 days, and no later than 120 days, after a foreclosure lawsuit was filed. The program also required the mediation manager to contact the homeowners to explain the program and find out if they wanted to participate in the program.
Problems with Florida’s Statewide Foreclosure Mediation Program
Unfortunately, many problems were noted with the statewide foreclosure mediation program including:
- low homeowner participation rates
- mediators did not enforce program rules, and
- lenders were inflexible in the negotiations.
Also, even prior to the implementation of the program, Florida courts were overwhelmed with the huge volume of foreclosures filed in the state. The mandatory mediation program caused further delays while providing little benefit to homeowners.
Consequently, the Florida Supreme Court terminated the statewide mediation program on December 19, 2011. No new cases were allowed into the program after this date, though cases that had already been referred (and were still pending) were allowed to complete the mediation process.
Current Mediation Options for Homeowners in Florida
The order terminating the statewide program stated that circuit chief judges could adopt or employ any measures permitted by statute or court rule to manage pending and new residential mortgage foreclosure cases. As a result, while some circuits rescinded the mediation programs that had been based on the Supreme Court’s order, others devised new and improved mediation programs for residential mortgage foreclosures.
Some judicial circuits in Florida still offer foreclosure mediation. To determine if there is a foreclosure mediation program available in your circuit, contact the court administrator’s office or visit the local circuit court’s website. (To find out which circuit you are in, look at the foreclosure complaint. The circuit court number will be located on the first page of the complaint.) Additionally, under Florida law, a court in any circuit may refer a case to mediation on a case-by-case basis if it believes mediation will be a beneficial and cost efficient way to resolve the foreclosure.
Contact your lender directly. You can always contact your lender or loan servicer directly to find out what types of loss mitigation they offer to help homeowners avoid foreclosure. (To learn more about different types of loss mitigation, see Avoiding Foreclosure: Basic Workout Options From Your Lender.)