Florida Supreme Court Orders Mediation- Lenders Don’t Care
March 16th, 2010 · Matt Weidner Law dot com
The
headline from today’s front page of the Saint Petersburg Times reads,
“Effort
To Save Homes Lags”
The headline should read:
“Mediation
Will Not Solve The Foreclosure Crisis And it May Make Things Worse For
Homeowners”
The full text of the article, in which I am
quoted, can be found below, and I encourage everyone involved in
foreclosure to read the article in full
Saint
Petersburg Times Article Here
I have several concerns related to the mediation process in
foreclosure. First, although the Supreme Court rules mandate that the
lender’s representative appear at the mediation and have full settlement
authority, many of these lenders are in fact going to be constrained by
the current modification requirements that prevent any significant
number of modifications from being approved. The Supreme Court can
order mediation, but only federal intervention can force a change in the
modification parameters that will allow them to be successful in any
meaningful numbers. Accordingly, I expect the response from lenders to
the Supreme Court’s new rules will be, “You can force us to the
mediation table, but you cannot force any meaningful mediation to
occur.”
A second issue that any party considering a modification must
consider whether the modification is issued in mediation or outside
mediation is the modifications I have seen thus far do not offer any
significant reduction for the homeowner. While any bit of relief is
helpful, buried in the small print of most modifications is language
that forces the homeowner to give up many of the rights and defenses
that homeowner may have in a typical foreclosure defense. As a result,
lawyers and their clients need to think long and hard before agreeing to
any modification, either in mediation or not.
Bottom line is while mediation may relieve some of the pressure on
courts….at least for the short term…mediation will do precious little to
solve the fundamental problems that exist within the system.
Gingo and Orth Law 