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Florida's foreclosure mediation could end

A Florida Supreme Court mediation program should end because it hasn't kept people in their homes or reduced a logjam of foreclosure cases, a judicial committee determined.

Successful mediations occurred in less than 4 percent of statewide cases. A report presented to the high court said three main factors led to the program's demise: borrowers not trusting the program; lenders not willing to settle cases in mediation; and officials not publicizing the program.

Florida has a backlog of about 350,000 foreclosures and many more to come, experts say.

The judicial committee recommended that the state's 20 judicial circuits send foreclosure cases to mediation on a case-by-case basis. The Supreme Court justices have to vote on the recommendations for them to be enacted.

Local officials want the program to remain in place.

Thomas McGrady, chief judge of the Pinellas-Pasco County Circuit, said officials could not track the outcome of cases after mediation ended, and bank representatives had no authority to negotiate. Fixing those issues could have raised success rates, he added.

"I would like some part of it to continue," McGrady said. "Every time there is a successful mediation, someone was able to stay in their homes."

Dick Rahter, president of Clearwater-based Mediation Managers, said: "I do think it's a good program and hope it continues. We think it helps people."

The Supreme Court ordered the 20 judicial circuits in late 2009 to sponsor mediation sessions between homeowners and lenders. Lenders paid a $750 fee for each case. A successful mediation could lead to a modification of the mortgage loan, such as a lower interest rate or a time extension for the borrower. Some people would still lose their homes.

The mediation was touted as a solution to the foreclosure ills, but attorney Matt Weidner of St. Petersburg isn't surprised it tanked.

"It just another example of banks controlling the government," he said. "They don't like the rules and don't follow them."

Florida's foreclosure mediation could end 10/24/11 [Last modified: Monday, October 24, 2011 9:58pm]
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