Some of the best legal minds in Florida came together earlier this year to study the effect the flood of foreclosures is having on our state.
The conclusion of the Florida Supreme Court Task Force on Residential Mortgage Foreclosure Cases -- the situation is "horrifying" and "grim."
The task force's solution -- managed mediation. READ THE REPORT HERE
The hope is that by bringing borrowers and lenders together in mediation early in the foreclosure process, solutions can be found.
It's clear that the problem is significant in Broward, which has the 6th highest foreclosure rate in the U.S.
There is a proposal for mediation floating through Broward County judicial circles that would establish a mediation program but it has not been finalized at this point.
George Castrataro is an attorney who handles dozens of foreclosure cases. From his experience, he said loan modifIcations are taking at least 6 months to complete. He said foreclosures are taking at least 8-12 months to wind through the court system.
He believes mediation would bring homeowners and lenders around a table much earlier in the process and give homeowners a voice when they have difficulty receiving information, answers or courtesy from their lenders.
"The mediation insures a stopgap measure," Castratoro told me. "It insures that the bank will have to listen."
Castrataro said mediation can result in a loan modification, a reduction of a borrower's principal or, if foreclosure can't be avoided, a homeowner might walk away without significant debt.
Another benefit, according to Castrataro, mediation brings a higher-level banking employee to the table who can make decisions more quickly than the person on the other end of the phone in a bank's loss mitigation department.
I'll keep you posted on how the mediation proposal in Broward shakes out.
