TAMPA, Fla. – Jan. 5, 2009 – Florida homeowners facing foreclosure may soon get one last chance to negotiate with lenders trying to take back their homes.
The Florida Supreme Court issued an administrative order last week that requires a third-party mediation program with all new foreclosure lawsuits involving primary residences.
The goal of the order, written by Chief Justice Peggy Quince, is to help handle the state’s glut of foreclosures. An estimated 456,000 foreclosure cases statewide are clogging the court system, she said.
Florida has the third-highest mortgage delinquency rate in the nation, according to the order. “The crisis continues unabated,” Quince wrote.
The order backs a recommendation made in August by the Supreme Court’s residential task force. The court asked the task force to study the problem and offer guidance.
“I’m pleased the court recognized the need of what the task force asked for,” said Alan Bookman, a task force member and former Florida Bar president. “This is going to force lenders and borrowers to talk to each other. They may not be able to work something out, but it’s a start.”
Lenders have spoken out against mandatory mediation and said it would cause even more delays. Alex Sanchez, president and CEO of the Florida Bankers Association, told the Tribune in August that lenders already are in constant touch with borrowers and file foreclosure cases as a last resort.
Sanchez could not be reached for comment Monday.
The mediation order will be executed through the chief judges of Florida’s 20 judicial circuits. Bookman said he expects the program to be in place by mid-February.
The program requires sending all cases involving primary residences to mediation unless the plaintiff and borrower have already done so or both parties agree to opt out.
The cost of mediation is not to exceed $750, according to the order. Lenders would pay the fee initially, though they could recoup some costs if mediation fails and a foreclosure lawsuit is filed in court.
It’s unclear on what date the mediation requirement kicks in, but it does not apply to cases already in the pipeline, Bookman said.
The order likely will apply to cases filed after the chief judges sign orders for each circuit, Bookman said. However, the chief judges could assign a different date.
“They could make it affective for cases filed this week, when the order was signed,” Bookman said.
Most areas of Florida continue to see a rise in foreclosure filings.
However, the Tampa-St. Petersburg-Clearwater metro area recently saw overall foreclosure filings slow. The November number dropped 9 percent year-over-year and 1 percent from the previous month, according to RealtyTrac, a California company that tracks mortgage activity.
Even so, the area has been rocked by foreclosures. The category of filings known as new foreclosure lawsuits increased in November, from 31,380 the month before to 32,276.