As foreclosure filings continue to pile up in Pinellas and Pasco counties, the courts are trying a new emphasis on mediation.
The move targets owner-occupied properties, not investments.
Now, when homeowners are served with a foreclosure lawsuit, the paperwork should come with an explanation of their right to mediation and information about how to set it up.
"We want to encourage people to try to save their homes," said Thomas McGrady, chief judge for the 6th Circuit.
He signed an administrative order last month that requires lenders to notify homeowners about mediation, a meeting of both parties out of court in which they try to resolve their dispute without going before a judge. It has always been available, but court officials say most borrowers take no action in a foreclosure and simply accept losing their home. Through mediation, they might be able to obtain a loan modification that enables them to keep their house.
The order also requires the lenders to provide contact information. Judges around the state say they hear the same complaint from borrowers: They're in trouble on their loan but they can't reach anyone at the bank.
"I think the concern is the possible disparity of knowledge of the system," McGrady said, noting a typical homeowner probably knows less about navigating the process than bank officials.
Under the new order, the $150 mediation fee will be paid by the lender. But if the mediation results in no settlement, that money can be added to the final judgment against the borrower, McGrady said.
There's also a boilerplate defendant's motion, which can be downloaded from the circuit's Web site, that homeowners can use to request mediation.
The move by the court comes as Pinellas County saw 1,239 new foreclosure filings in October alone. In Pasco, the number was 762, with more than 12,000 pending.
"Our caseload is massive," said Pasco Circuit Judge Lynn Tepper, whose duties recently expanded to include foreclosure cases.
She also presides over juvenile delinquency court and sees a connection between foreclosed, abandoned homes and the juveniles who appear before her accused of vandalizing them.
"The neighborhood can only be helped by a home that's occupied and maintained," she said.
Tepper favors implementing a comprehensive managed mediation program for foreclosure cases. That's the model recommended by the Task Force on Residential Mortgage Foreclosures convened by the Florida Supreme Court. Citing the backlog of more than 290,000 foreclosure cases across the state, the panel says reaching out to borrowers is vital.
"Most of these folks, they're not denying they're in default. They're not trying to pull a bunch of voodoo delay tactics. They know they owe this money; they just want to know if something can work out," Jennifer Bailey, a Miami circuit judge who is head of the task force, told the justices this month.
McGrady said he wants to wait and see what tack the Supreme Court takes before adopting a broader program.
"We're trying this and we'll see if it works," he said.
Molly Moorhead can be reached at [email protected] or (727) 869-6245.