Foreclosure Mediation Program in Florida

Some states offer homeowners facing a foreclosure the opportunity to participate in a foreclosure mediation program. Attending mediation doesn't guarantee you'll be able to prevent a foreclosure. But you might be able to figure out a way to keep your home or exit the property, like by completing a short sale or deed in lieu of foreclosure, under terms you can live with.

In 2009, during the foreclosure crisis, the Florida Supreme Court instructed the state's circuit courts to implement a statewide uniform foreclosure mediation program. This program ended in 2011. However, courts in Florida can still refer foreclosure lawsuits to mediation on a case-by-case basis.

So, in a Florida foreclosure, you might be able to request mediation as part of the process.

What Happens When a House Goes Into Foreclosure in Florida?

Foreclosures in Florida are judicial, which means a court handles the procedures. The process officially begins when the loan holder (called the "lender" in this article) files a complaint (lawsuit) in court.

After the lender files the lawsuit, you'll be served a copy of the complaint and a summons. The summons tells you about the suit, how to contact the lender's attorney, and the deadline to file a response to the suit, called an "answer." Generally, you get 20 days to respond.

If you fail to answer the suit, the lender will likely get a default judgment. But if you file an answer, the foreclosure proceeds through the litigation process. The lender might file a motion for summary judgment asking that the court grant judgment in favor of the bank because no real factual or legal issues need to be dealt with at trial. If the court grants summary judgment, the judge will order the home sold at a foreclosure sale.

However, if the court denies summary judgment, the foreclosure case will probably eventually go to trial, where you'll have to prove your case. If you're unsuccessful, the judge will enter a judgment allowing a foreclosure sale.

What Is Foreclosure Mediation and How Does It Work?

In general terms, "mediation" is a form of alternative dispute resolution. "Foreclosure mediation" is a process in which a homeowner, the loan servicer (on the lender's behalf), and a neutral mediator meet to try to work out a loss mitigation option, like a loan modification, to avoid foreclosure.

Generally, foreclosure mediation follows these steps:

• The mediator makes some opening remarks and identifies the reason for the meeting (that is, to work out an alternative to foreclosure or continue with foreclosure procedures).
• The borrower provides information to the lender's representative (such as income and asset information). The lender's representative might show evidence of the borrower's default.
• The parties negotiate and discuss loss mitigation options. For example, the borrower might explain why they would like a loan modification, and the lender might state why the borrower doesn't qualify for that option.
• The mediation concludes with the parties coming up with an alternative to foreclosure or proceeding with the foreclosure.

History of Florida's Statewide Foreclosure Mediation Program

In December 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 nonprofit organization to manage the mediations, and the circuits began implementing the programs in 2010.

Unfortunately, the statewide foreclosure mediation program had many issues, including low homeowner participation rates, mediators who didn't enforce program rules, and lenders who were inflexible in the negotiations. Also, even before implementing the mediation program, Florida courts were overwhelmed by the massive volume of foreclosures filed in the state. The mandatory mediation program caused further delays while providing little benefit to homeowners.

So, the Florida Supreme Court terminated the statewide mediation program on December 19, 2011. No new cases were allowed into the program after this date. However, cases that had already been referred and were still pending were allowed to complete the mediation process.

How Does Foreclosure Mediation in Florida Work Now?

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. So, some circuits in Florida, such as the Eighteenth Judicial Circuit, implemented foreclosure mediation processes.

Also, 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. (Fla. Stat. § 44.102, Fla. R. Civ. P. 1.700(a)).

Either way, you might have to file a motion with the court or otherwise request mediation. Talk to a local foreclosure lawyer to learn about options in your situation.

Potential Mediation Outcomes

Potential outcomes of mediation include:

• reinstating the mortgage loan
• restructuring the loan with a loan modification
• a forbearance agreement
• a repayment agreement, or
• liquidating the property with a sale, short sale, or deed in lieu of foreclosure.

Should You Participate in a Foreclosure Mediation Program?

While participating in a foreclosure mediation program doesn't force the lender to give you a foreclosure alternative, it doesn't hurt to go through the process. In most cases, going to mediation is a good idea; the lender could be more likely to agree to a nonforeclosure solution when you go through official mediation procedures, or you might qualify for a loss mitigation option you hadn't previously considered.

Even if mediation doesn't help you avoid a foreclosure, it might buy you some extra time to remain in the home without making any payments.

Getting Help

Foreclosure mediators are typically trained in mediation and federal and state foreclosure laws. They also usually know about different community-based resources and mortgage assistance programs that could be available to help homeowners facing foreclosure. But they don't represent either party in the mediation process and can't give legal advice.

So, while you don't have to hire a lawyer to represent you in your foreclosure mediation, it's often a good idea. A lawyer can give you legal advice specific to your situation and advocate on your behalf, helping you negotiate a way to avoid foreclosure. A lawyer will also ensure that your legal rights are protected in the process. And, if you're thinking about filing a response to the foreclosure or any other motion with the court, consider talking to an attorney beforehand to discuss the consequences of doing so and your various options.

You might also consider consulting with a HUD-approved housing counselor to learn more about foreclosure avoidance options.