Posted on Thursday, February 24, 2011
About 40 percent of Palm Beach County homeowners eligible for foreclosure mediation are unreachable, unresponsive, or choose not to participate in the new program.
Run by the Palm Beach County Bar Association and free to homeowners, the arbitration program began in July with the intent to help avoid foreclosure through other options such as a loan modification, an agreement for a short sale, or a deed in lieu of foreclosure.
About 3,200 homeowners who received an initial foreclosure notice have been sent information about the mediation, which puts them face to face with their lender. Of those, 1,300 have been listed as not participating.
Michael Napoleone, president of the Palm Beach County Bar Association, said it has been so difficult to reach some people that an initial deadline that gave organizers 30 days to contact homeowners was extended last week to 60 days.
"People coming in, even if they aren't getting a resolution, they feel better because they've had the opportunity to talk to someone from the bank," Napoleone said.
The mediation can't be held until at least 60 days after the initial foreclosure is filed, meaning Palm Beach County's sessions didn't begin until about mid-September. Of 41 mediations that have occurred, 10 reached a settlement that avoided foreclosure, Napoleone said. Another 100 mediations are scheduled.
The Supreme Court of Florida ordered the state's 20 circuit courts to hold foreclosure mediation sessions last year in an effort to reduce the number of cases in the system.
The mediation is free for borrowers with homesteaded properties. The borrower is required to meet with a financial counselor before the mediation and provide tax and paycheck stubs. Lenders are charged a fee of $750 per case.
Palm Beach County isn't alone in its struggle to contact borrowers, and has been more successful than both Broward and Miami-Dade counties.
The American Arbitration Association, which handles Broward County's program, reports that as of July 1 it has been unable to reach 70 percent of eligible homeowners.
Deluged with foreclosure-related mailings, some beleaguered home¬owners believe the mediation is a scam, said India Johnson, senior vice president for the association.
"There is great fear in the community that it is something fraudulent," she said.
In Miami-Dade County, about 68 percent of home¬owners who were sent information about mediation in a four-month period beginning in March did not participate.
The Collins Center, which handles Miami-Dade's mediation, said the majority of homeowners could not be reached, while others refused to meet with a financial counselor or said they were not interested.
One problem, Johnson said, is that people who are negotiating for a loan modification believe they don't need mediation. But she said it's still a good idea because it puts the borrower and lender together instead of having them go back and forth with mailings and phone calls.
"The legal side and the business side at the bank may not always be connecting," Johnson said.
People facing foreclosure are given the opportunity to meet with their lender.
• About 3,200 county homeowners have been sent mediation information. Of those, 1,300 are not participating.
• It's free to homesteaded borrowers in foreclosure.
• The borrower must meet with financial counselor and provide tax and pay information.
• Banks pay $750 per case.
WEST PALM BEACH -Kim Miller PBP