With 900 new foreclosure cases flowing into Pinellas and Pasco courthouses every month, a new mediation program aimed at keeping people in their homes is about to kick into gear.
The program, implemented at the behest of the Florida Supreme Court, applies to owner-occupied, residential properties — not real estate speculators or vacation homes.
"We're trying to target those to keep people in their homes first. It's your home, you want to save it," said Thomas McGrady, chief judge in this circuit.
McGrady said the situation is nothing less than a crisis. On top of the tide of new cases, there's also a backlog of 33,000 foreclosures sitting on judges' desks in Pinellas and Pasco.
The mediation program aims for a quick resolution. McGrady's administrative order dictates that cases go to a mediator within 120 days of the suit being filed.
It will be run by Clearwater-based Mediation Managers Inc., which has a force of 60 mediators to hear the cases. Mediators facilitate discussions between parties but have no power to force either side into a settlement.
But when hearings get under way next month, it will be a step forward just getting borrowers and lenders to sit down at a table together.
McGrady said a universal complaint judges hear from borrowers is that they can't reach anyone at the lender with the power to help them, or they never get to talk to the same person twice.
"They have to be there," McGrady said of lenders. "Now that doesn't mean it's going to settle, but at least you get all the parties together."
The borrowers have some rules to follow, too. They must provide financial disclosures and participate in housing and financial counseling.
"Oftentimes we find that borrowers really don't understand their own finances," the judge said. "This is to get an honest assessment for them."
Mediation costs $750, but it's covered by lenders up front.
"That is very important that people understand that," Pasco County Commissioner Pat Mulieri said.
If mediation fails, lenders can seek to tack that cost onto the final judgment.
A successful mediation could lead to a modification of the terms of the mortgage loan, such as a lower interest rate or a time extension for the borrower. Some people still will lose their homes.
The program automatically captures all foreclosure cases filed since July 1.
Borrowers who were sued before that date can opt in to mediation, but they must ask for it.
"We want them to call," McGrady said.
Molly Moorhead can be reached at firstname.lastname@example.org or (727) 869-6245.