A statewide program established in 2009 to require mediation in residential foreclosure cases isn’t working and should be significantly changed, a panel set up by the Florida Supreme Court concluded Friday in a report that warns of another deluge of foreclosure cases.
Following a series of conference calls and a review of public comments, a work group led by Second District Court of Appeal Judge William Palmer called on the state’s highest court to eliminate the requirement that all borrowers and residential mortgage holders seek mediation as part of the foreclosure process.
Further, chief justices in the 19 judicial circuits should be given more flexibility to modify the proceedings to meet their particular needs, Palmer said in a response to a request last month from Chief Justice Charles Canady.
The process, established in 2009 by then Chief Justice Peggy Quince in response to a backlog of foreclosures, is not well-known and apparently doesn’t provide the proper incentives for borrowers and troubled mortgage holders to settle, the workgroup said. The result, the panel concluded, is that “the emergency” of foreclosures that prompted the 2009 rule continues to exist.
“There are now approximately 350,000 backlogged foreclosure cases in the circuit courts,” Palmer wrote. “… These cases will continue to languish if additional resources are not provided to the courts.”
Toward that end, the group said judicial circuits in which mediation programs are working should be allowed to continue their efforts. The workgroup urged the high court to make changes to make the process more attractive to the parties involved and removing a requirement that all cases go through mediation.
Chief circuit judges, however, should be allowed to tailor mediation proceedings as they see fit, the panel said.
The group said improvement needs to be made quickly because the problem is not going away.
Florida accounted for one of every nine properties with foreclosure filings nationwide during the third quarter ending Sept. 30, according to RealtyTrac. The quarterly increase was prompted by a 24 percent increase in new default notices.
“Circuit courts likely will face a new surge of cases in 2012, which will further exacerbate the backlog and further delay finality,” Palmer concluded, noting that Florida and Nevada had the highest percentage of delinquent mortgage loans in the country during the fourth quarter of 2010.
The group said it did not have enough time to come up with specific remedies to the existing mediation program. Instead, it mapped out a series of issues that should be addressed by another group that would have more time to review data from the fledgling program.
“Florida’s economy will continue to be depressed as long as there are massive numbers of mortgages in default that have not been resolved by foreclosure,” Palmer said.
By Michael Peltier
