Florida’s Foreclosure Mediation Program – A flower or a weed?

Boy has the Residential Mortgage Foreclosure Mediation Program in Florida come under fire lately.  This morning I read a blog written by Roger Benson that just skewers it.  Benson claims that the only group benefitting from the program is “banks and other lenders.”  There is one thing I know for sure in this world and that is lenders and banks would surely take issue with that statement.  He also references “the enormous investment in time, resources and money made by The Florida Supreme Court.”  Yes, the Court has spent considerable time through volunteer workgroups setting up and analyzing the program but Benson is wrong about where the money is coming from as it is NOT from the Court.  Lenders fund Florida’s program.  Benson even cites to the fact that it is difficult to persuade lenders to agree to a second mediation because “it costs them $750 and it slows the race to a final judgment of foreclosure.”  Wrong again.  Florida’s program costs a total of $750 and that price includes administrative costs, foreclosure counseling and two (yes, two) mediation sessions.  Florida’s program only costs lenders $300 in the 7th Judicial Circuit if the program is unable to contact the borrower which happens in 50-60% of all foreclosure cases.  Furthermore, a study of Miami-Dade cases that have gone through the program shows that more than 70% of all cases that went through the program remain on the docket more than  1 ½ years after completion of the Program.  Let me guess, that’s the program’s fault too?

Let me introduce you to Cook County, Illinois.  Their one-year-old foreclosure mediation program has helped “tens of thousands of homeowners” according to the Resolution Systems Institute in its Summer/Fall 2011 publication of Analyzing the Alternatives.   Their feature article states that between April 2011 and July 2011, 23,322 housing counseling sessions were completed.  The article also provides that 402 cases reached agreements.  I presume that more than 23,322 cases came into Cook County from April-July 2011 but let’s use the 23,322 counseling figure for argument’s sake.  Using their numbers, a whopping 1.7% of cases that entered their program from April –July 2011 resulted in agreements.  That figure should look shockingly similar to what is coming out of Florida’s program.  In fact, Florida’s statewide settlement percentage may be a tad higher, yet Florida is on the verge of eliminating its statewide mandated foreclosure mediation program.

What we have here is a perception problem.  Cook County appreciates that “helping” tens of thousands of homeowners may not necessarily mean that they get to stay in their homes or even settle at mediation.  Cook County values the outreach their program offers and the education that is provided to sometimes unsophisticated borrowers.  Cook County is comfortable operating in the “grey area” rather than focusing on the hard numbers.

Bravo, Cook County!  I like that your program requires borrowers to meet not only with foreclosure counselors but also with legal aid attorneys.  I like that you provide door-to-door outreach.  I like that your program provides representation for homeowners at mediation.  I just wish Florida could perceive the good in the seed that it so wisely planted and offer it a little water and fertilizer before it is pulled out as a “weed.”

Sandra C. Upchurch
Upchurch Watson White & Max

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