We are pleased (and amused) that judges agree with what foreclosure defense attorney Roy Oppenheim has repeatedly said. The mandatory foreclosure mediation is barely helping homeowners because the banks refuse to reach agreements with the borrowers.The Daily Business Review looked to state and bankruptcy judges to point out some of the main issues with the foreclosure mediation program. The Review sponsored a series of panel discussions where judges were asked to provide insight into the foreclosure mediation process.
Expanding the sanctions that could be imposed on banks was one of the better ideas presented. Chief Judge Peter Weinstein for the 17th Judicial Circuit made note of the fact that borrowers are placed at a disadvantage during mediation because the documents are getting lost by the lenders and borrowers are forced to submit the same paperwork several times.
Judge Weinstein believes some sort of sanction should be imposed to deter lenders from being careless with submitted paperwork. These concerns have been previously addressed by Oppenheim. Back in July, he specifically pointed out to that the banks are constantly loosing documents provided by borrowers and at the banks failure to come prepared to mediation.
“They did not show up to negotiate a solution,” he added. “There’s a systemic pattern here, and that pattern ultimately suggests evidence of sanctionable actions.”
Another concern with Florida’s mediation process was brought by Judge Ronald Dresnick, who said that the mandatory confidentiality during mediation also hinders borrowers from being able to reach an agreement with the lender during mediation.
What Judge Dresnick is suggesting is that if lenders are not mediating in good faith, then the mandatory confidentiality agreement should not stand and sanctions should be imposed.
This is the very same issue that was brought up by South Florida Law Blog’s Roy Oppenheim during an earlier interview with the Palm Beach Post.
Oppenheim said, “Most banks want to look only at modifications, for which owners may not qualify . . . you have someone on the phone from the bank and the only thing they can do is modify . . it’s not meditation; its modification or bust.”
It is widely known that banks are not exactly enthusiastic about expediting foreclosure cases and in fact are barely agreeing to loan modifications for homeowners who are at risk of default. Even with the Home Affordable Modification Program, lenders hare happy to continue charging high interest rates to homeowners rather than work with them to lower their rates.
However, while all these suggestions help to encourage banks to take the mediation process seriously and protect the borrowers by ensuring they have a fair chance at reaching a settlement, until such changes are implemented, mediation will continue to be ineffective in helping homeowners.