Oppenheim in the News: State Mediation Program Helps Few Florida Homeowners
It’s a case of: The Three Stooges and Mediation.
Under a state Supreme Court order issued 18 months ago, banks have been paying third-party mediators to perform outreach and mediation in an effort to keep Floridians in their homes. But in spite of spending at least $750 per case, the lenders rarely get homeowners into mediation.
According to defense attorneys, lenders appear unprepared to mediation, only prolonging a foreclosure case. It took homeowner Juan Picasso, who went into default after his son was diagnosed with a rare cancer, 26 months to get a modification on his mortgage. Deciding to do the application for modification himself, Picasso’s application for modification was denied three times and it wasn’t until he sought foreclosure defense attorney Roy Oppenheim’s help, that the case was settled with the bank.
Picasso described a mediation session that could have been in a Three Stooges short film.
Oppenheim, a foreclosure defense attorney in Weston, produced the letters as proof and noted the bank kept losing its copies of Picasso’s financial information and the bank’s responses.
“They kept saying all kinds of different things. They force-placed insurance on the property. They said Mr. Picasso’s insurance ran out so they put a ridiculous insurance policy on the property, which quadrupled the cost of insurance. He was in default because they were not keeping track of the insurance they put on his home.”
Roy Oppenheim explained to the Daily Business Review that the mediation program was designed to be a more flexible forum for homeowners to get a loan modification or sale to avoid foreclosure.
“If you think there’s going to be a principle reduction, forget it,” Oppenheim said. “That’s never on the table. Those are just urban legends and the stuff of Internet scams.”
In many cases, mediation settlements resulted in a short sale to avoid affecting the Florida homeowner’s credit history. The program requires homeowners eligible for mediation, some 63,019 individuals, to pro-actively take advantage of it. However, by the end of 2010, only 8,669 mediations were conducted, of which only 2,309 resulted in an agreement.
A major bottleneck in the process is that banks continue to be overwhelmed. The lawyer for the bank may attend the mediation in person, but he has no authority. The bank’s modification officer appears by phone and the bank representative online has limited authority, never makes a decision during the meeting and routinely discusses the case as if he is looking at the file for the first time.
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