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Foreclosure Mediation & Conciliation
Now, An Opportunity to Resolve Foreclosures Through Negotiation
There were approximately 423,700 foreclosures in Florida in 2009, and there are a projected 1.4 million more to come over the next four years. Because of this, in 2009, a group of private lawyers and legal service organizations petitioned the Supreme Court to require mediation in all new and pending cases involving home mortgage foreclosures. “Too often, it is not until the lender’s motion for summary judgment is heard, or even later at the foreclosure sale itself, that these individuals first have an opportunity to discuss their situation with the lender and attempt to resolve their differences,” according to the petition. “By then, it is too late.”
It is believed that pre-judgment mediation will save more than 150,000 Florida homes from foreclosure and assist more than 360,000 Florida homeowners. The petition notes, “At a time when the number of mortgage foreclosures has increased by 97% statewide in the past year and national banks face the possibility of twenty different foreclosure procedures in each of Florida’s twenty circuits, a uniform statewide system which requires lenders and homeowners to come together after filing suit but prior to foreclosure is necessary.”
Now, the most frustrating issue homeowners in foreclosure face – the inability to speak to the decision-maker at their mortgage company – has been eliminated by mandated mediation. Mediation presents the opportunity for the homeowner to discuss his/her situation with his/her lender to attempt to resolve his/her differences prior to the lender's motion for summary judgment.
Some common examples of the nightmares homeowners face during foreclosure:
• Homeowner is exhausted from his/her almost two-year foreclosure fight.
• They have applied and been denied for every government program available.
• Due to the job market, the family income has been reduced.
• Many are families with children and are looking for the lender to reduce their monthly payment, even if it is temporary.
• Homeowners just cannot believe there is not a program out there that can help.
• The major frustration is they cannot discuss their situation with the decision-maker from their mortgage holder who will fairly attempt to work out a solution before it is too late.
Foreclosure Mediation: A New Beginning
There is now a program designed to do just that - FORECLOSURE MEDIATION. Every homeowner facing foreclosure should be informed about mediation. The goal is clear: to eliminate the backlog of tens of thousands of homes that have clogged the court system by launching foreclosure mediation programs as of July 1, 2010. The programs in each county are mandated by the Florida Supreme Court. Most importantly, every homeowner entering the program will have the opportunity to mediate with his/her lender directly instead of going through the traditional court proceedings.
Every borrower has the choice but the lender is required to pay and participate.
The program works like this:
Once a foreclosure case is filed, it will be referred to a case manager from the company handling the mediation program, often American Arbitration Association. The homeowner will be notified and, if they agree to mediation, will undergo credit counseling sessions. The homeowner and the lender will meet at the mediation table to work out a resolution, which could mean reducing principal, reducing the interest rate or letting go of their home. There is no guarantee each case will come to a resolution.
The process is expected to take four months. With cases that have foreclosure action after July 1, 2010, the cost of the mediation sessions -- which could be up to $750 -- will be borne by the servicer because they are required to pay.
What Amerihope Alliance Legal Services can provide and why you should have LEGAL representation:
• If there are legal proceedings filed against a homeowner, the homeowner must be given an option to attend mediation. This means two things: first, the lenders have an attorney representing them who will be present at the mediation date and the homeowner should as well. Second, if the mediation is not successful, then it is likely the legal process will continue and Amerihope Alliance Legal Services will represent the homeowner through-out the entire process.
• If you are a homeowner who has been served a foreclosure lawsuit after July 1, 2010, you will receive a letter informing you of your right to attend mediation. If you receive these papers, let us assist you in understanding the mediation process.
• Our firm understands that many homeowners have experienced job loss, health problems and loss of income. Foreclosure is not a quick process. It can drag on for years. One advantage to homeowners who opt for mediation is a much quicker turnaround. Entering into mediation mandates a resolution within 120 days.
• It can be confusing to know who qualifies for this mediation program. Technically, the primary homeowners who are guaranteed participation in the mediation programs are those receiving initial filings after the program formally started on July 1, 2010. However, we encourage anyone who wants to save their home to request mediation.
FREQUENTLY ASKED QUESTIONS
Are fees involved and who pays?
If you have received an initial foreclosure lawsuit and a letter informing you about your right to mediation, the initial fees will be paid by the lender. Under the court’s Administrative Order, if the case is not resolved through the mediation process, the lender may recover these costs in the final judgment of foreclosure.
Amerihope Alliances Legal Services has several programs for Foreclosure Defense which include an attorney present at the mediation in Miami-Dade, Broward and Palm Beach counties and many other counties in the state of Florida, please call for a Free Consultation.
What is Mediation?
Mediation is a non-binding process where a neutral third-party (the mediator) works with the parties to reach a mutually agreeable settlement. If a settlement is not reached, the mediator has no authority to impose one.
What benefit can mediation be to a homeowner?
Mediation creates an opportunity for homeowners and lenders to reach a mutually agreed upon resolution possibly avoiding and thereby stopping foreclosure.
Homeowners will have an opportunity to communicate with their lender to discuss their current financial situation and engage in settlement negotiations.
What kind of outcome can be achieved?
Homeowners who enter mediations with legal representation have seen much higher success rates than those that go without. Although the American Arbitration Assocation has had some success on their own, going to mediation conferences without a defense attorney leaves homeowners at a serious disadvantage when they are faced with an opposing counsel who will not be motivated to negotiate in their best interest.
There are a number of possible solutions that you and your lender can explore. The solution will depend upon your income and expenses, what type of loan you have, the amount you owe in arrearage, and other factors that will be discussed. Each lender has a different loss mitigation program. The following are some possible solutions:
Loan Modification, Principal Reduction, Reinstatement Plan, Repayment Plan, Forbearance Plan, Extension Agreement, Deed in Lieu of Foreclosure, and Short Sale.
If I have been named in a foreclosure case and have not been referred to the mediation program, what can I do?
There are timelines established by the Court. Amerihope Alliance Legal Services can provide information about your particular situation during a free consultation. You may be able to request a mediation.
What are the rights and responsibilities of homeowners?
Homeowners have the right to be represented by an attorney or other designated individual in mediation at their own expense. Homeowners may apply for a volunteer attorney run by lawyer referral, legal services or legal aid.
Homeowners are required to cooperate with their county guidelines.
Homeowners must meet with an approved foreclosure counselor prior to the mediation. This counseling can be achieved via the telephone.
Homeowners DO NOT have to agree to any settlement proposal. Cases that do not reach an agreement in mediation will be sent back to court.
Who is a foreclosure counselor?
Foreclosure counselors are trained and certified in advising homeowners about options available when facing a mortgage foreclosure.
Who are the mediators?
Mediators participating in the foreclosure mediation program are trained in mediating residential mortgage foreclosure matters and are neutral and impartial.
Will the mediator render a decision on my case?
The mediator does not decide who wins or loses or who is wrong or right. Their role is to help facilitate a settlement among the parties. They have no authority to impose a settlement.
Do I need a lawyer in order to participate in mediation?
No, you do not have to be represented by an attorney in order to participate. However, an attorney may be valuable since the mediation process frequently involves disputes about the legal rights of the parties. Whether or not you choose an attorney to represent you is your decision.
Who should attend the mediation session?
The lender’s attorney, the lender's decision-maker, the homeowner and the homeowner’s attorney of record, if any, should attend the mediation session.
What happens if we are unable to settle in mediation?
If the parties cannot come to an agreement at the mediation, the case may return to the court so that the foreclosure lawsuit can continue.
How much time will the entire mediation process take?
This depends on the county where mediation takes place, usually between 60-120 days.
Where will the mediation take place?
Mediation sessions will be held at suitable location(s). The parties will be notified of the date, time and location of the mediation with ample time to prepare.
Should I seek mediation to resolve my foreclosure issue?
The answer is different for each homeowner and we provide a Free Consultation to evaluate your situation. If you have been served a foreclosure lawsuit, your lender may still pursue a foreclosure action against you while you are trying to obtain a modification. Mediation may be the best answer as it brings you and your lender together to come to a solution.
Conciliation differs from mediation in several ways. Conciliation is a non-mandatory phone conference between the attorneys of the lenders and borrowers, held in order to reach a settlement. It does not use an independent mediator, has no additional costs, and does not require the borrowers to go to financial counseling. Best of all, conciliations is much more flexible with a homeowner's' financial situation and gives Foreclosure Defense Attorneys more opportunities to create a better settlement. Unlike mediation, homeowners are not required to come to the meeting and is handled entirely by our professional negotiators. These types of negotiations are not accepted by all mortgage lenders and require a greater amount of research into the client's financial documents by the defense attorney. However, concilations are much quicker and easier to schedule and can be effective solutions to staying out of foreclosure. The courts are very receptive to these out-of-court negotiations.