Mediation program to prevent foreclosures starts next month

Pinellas deputy clerk Anne Theriault keeps paperwork moving as she processes foreclosure documents on homes sold at auction that need new titles. There’s a backlog of 33,000 foreclosures sitting on judges’ desks in Pinellas and Pasco counties.

JIM DAMASKE | Times

Pinellas deputy clerk Anne Theriault keeps paperwork moving as she processes foreclosure documents on homes sold at auction that need new titles. There’s a backlog of 33,000 foreclosures sitting on judges’ desks in Pinellas and Pasco counties.

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 moorhead@sptimes.com or (727) 869-6245.

How the mediation program works

Mediation Managers Inc. is administering the new foreclosure mediation program for Pinellas and Pasco counties. It applies to all homeowner-occupied residential foreclosure lawsuits filed since July 1. The cost is $750 and is covered by the lender. If mediation fails, however, lenders can seek to have that fee added to a final judgment.

For homeowners interested in opting into the program, such as those sued before July 1, visit mediationmanagersinc.com or call toll-free 1-877-664-1217.

Fraud workshop

A free foreclosure fraud prevention workshop will be from 10 a.m. to 2 p.m. Saturday at the Enoch Davis Center, 1111 18th Ave. S in St. Petersburg.

Participants will learn how to recognize foreclosure prevention scams and what to do if currently facing foreclosure. HUD-approved counselors will be available during this time.

The free workshop is hosted by Pinellas County Justice and Consumer Services, the Community Law Program, St. Petersburg Neighborhood Housing Services Inc., Gulf Coast Legal Services and Tampa Bay Community Development Corp., in cooperation with the city of St. Petersburg. For information, call (727) 464-6200 or pinellascounty.org/foreclosure.

Mediation program to prevent foreclosures starts next month 07/15/10 [Last modified: Thursday, July 22, 2010 2:11pm]

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