Posted on Thursday, February 24, 2011
How does Florida foreclosure mediation work?
Florida passed a law requiring banks to allow homeowners the chance to meet with them to try to resolve their delinquent mortgages without having to go through the already overcrowded courts. Homeowners meet with their lender and a third party, the mediator, in a neutral location to try and work out options to stop foreclosure. During this time the homeowner’s current financial situation is reviewed and they are given a chance to explain why they are behind on their payments. The homeowner is allowed, and is encouraged to hire an attorney, who is also allowed to attend the mediation process. When the bank files a suit against the homeowner, they will also simultaneously file a form requesting mediation and send it to the Mediation Program Manager. A letter will then be mailed from the mediation office informing the homeowner of their right to mediation. The homeowner has 120 days from the date the suit was filed to call the mediation department in order to start the process. If the homeowner did not reply during that time the suit will continue and the homeowner will lose the right to mediation.
Who is the mediator?
The mediator is someone hired by the court system to act as a neutral party during the meditation process and is not allowed to offer any legal advice. The mediator is not an attorney, judge or anyone with any legal experience in foreclosures. They are simply trained to understand the basic foreclosure process and record whether or not both parties were able to come to a resolution. This can be an overwhelming process with an attorney as you will have no to represent you while the bank will have a lawyer and an expert from the bank present. Basically, the cards will be stacked against you from the moment you agree to mediation.
Do you qualify for mediation?
Your lender is only required to offer mediation if your property is a homestead residence. If not, you will have to fill out a form requesting to be considered for mediation. There is no guarantee that you will be allowed mediation if your home is not a homestead residence. If you are able to attend mediation, you must still answer the lis pendens received from the court. If you do not wish to attend mediation, you may simply ignore the request or respond that you do not wish to attend.
What rights do you have in mediation?
During the mediation process, you are allowed to state your reasoning for being behind on your payments. You are also allowed to request to see your payment history, how much is left on the mortgage and the current value of the property. This information can be used for negotiating with your bank for a favorable result. You must request this information 25 days prior to the mediation session.
What results can I expect from mediation?
When replying to the mediation form, you are given three options:
• Short Sale
• Deed-In-Lieu of Foreclosure
Bear in mind that if you are looking to refinance, you must prove that you have the ability to do so. Even then it may be hard to get your lender to agree to it. Unfortunately, there is no way of tracking the results from the mediation session, so a high success rate could mean a high number of people willingly giving up their homes (deed-in-lieu) to the bank.