Roy Oppenheim is quoted in the Daily Business Review on the Final Report from the Florida Supreme Court's Foreclosure Taskforce

Tue Aug 18, 2009 by on Florida Law News

Foreclosures: Mandatory mediation urged to help streamline process

By Jordana Mishory

Florida Supreme Court task force is calling for uniform mandatory mediation for all residential foreclosure cases in the state to deal with the tide of foreclosures that has swamped courthouses.

The proposal, obtained by the Daily Business Review, calls for all circuits to implement a mediation process modeled on a program used by the Miami-Dade Circuit Court and two others, where lenders pay for the mediation and borrowers provide their financial information to the lenders.

The goal is to require lenders and borrowers to meet in the hopes of working out a solution that doesn’t tie up the courts’ limited resources. Both sides in the foreclosure process have complained of an endemic lack of communication that bogs down cases.

“The task force determined the real problem here was capturing an opportunity for communication — for the borrower and the lender to convene in an informal and non-adversarial session to determine what could be worked out if anything,” according to the task force report.

If the proposals are adopted by the Florida Supreme Court, it would be the first instance of a uniform statewide effort in Florida to handle the glut of foreclosure cases clogging courthouses. Different circuits around the state have been dealing with the problems independently, but the lack of uniformity has caused problems.

According to the task force report, nearly 176,000 foreclosure cases have been filed from January to May of 2009. The volume has increased steadily.

In Miami-Dade there has been a 474 percent increase in foreclosure filings between 2006 and 2008. In Broward it has increased 516 percent and in Palm Beach County 496 percent.

The task force recommends all foreclosures involving residential homestead property be referred to mediation, unless the lender and borrower agree otherwise or unless pre-suit mediation occurred. Chief circuit judges would sign a uniform administrative order establishing these managed mediation programs.

In addition to the mandatory mediation, the task force also calls for the establishment of a central statewide foreclosure Web site, which provides information in a centralized place, including information on how to find certified foreclosure counselors, to contact lenders, access online court dockets and how to get legal help.

In cases where borrowers aren’t located, the task force also recommends a new form for process servers to fill out to demonstrate they undertook a diligent search to find the borrowers.

Former Florida Bar president Alan Bookman, who served on the committee, is hopeful that the Supreme Court will adopt the recommendations. He said the task force’s report is the result of a great deal of discussion and argument among a panel of lawyers, judges, bankers and mediators.

“We cursed it and discussed it and yelled at each other and kicked under the table and hashed out all various ramifications,” Bookman said. “This is what the majority ruled.”

Bookman, a Pensacola attorney, anticipates the Florida Supreme Court will invite public comment and hold oral arguments before taking action.

Florida Supreme Court spokesman Craig Waters said the chief justice hasn’t received the report and could not provide comment.

Broward Chief Judge Victor Tobin said he has been anticipating the task force’s final recommendations before implementing a foreclosure response plan in Broward. He intends to allow borrowers who want to work out their loan a chance to do so, but disagrees with the task force’s plan to have mandatory mediation in all instances.

“It’s not a good idea in all cases because a lot of the homes are vacant, and they are going to remain vacant,” Tobin said. “The owners of the property don’t want to negotiate or can’t negotiate.”

Miami-Dade Chief Judge Joel Brown and Palm Beach Chief Judge Peter Blanc did not return calls for comment by deadline.

Foreclosure defense lawyer Roy Oppenheim commended the task force for recommending mandatory mediation.

“One of the big problems that borrowers have had is getting in touch with an intelligent human being who has authority at the bank,” Oppenheim said. “Most of the time you’re dealing with people just pushing paper.” The 53-page report starts off by describing the foreclosure crisis and recession as a massive traffic jam during rush hour, in a thunderstorm during hurricane evacuation with a lane closed due to construction. The final report comes nearly three months after an interim report calling for uniform procedures statewide that did not provide much detail.

The task force says in its final report that the recommendations are not ideal fixes because of the budgetary crisis, noting that sometimes the proposals are the result of choosing between the lesser of two evils necessitated by the urgent need to find solutions.

“It would be a foolish exercise to address needs for foreclosure case managers, additional judges and support staff, special magistrates and court-funded mediation in the absence of any realistic expectation that such recommendations could be funded given Florida’s financial situation,” according to the report.

Florida Supreme Court Chief Justice Peggy Quince formed the task force, chaired by Miami-Dade civil administrative judge Jennifer Bailey, in March to find ways to ease the backlog of foreclosure cases. Bailey was out of town and couldn’t be reached for comment.

The panel has met 18 times as a committee, mostly on conference calls. The task force broke down into two subcommittees, and called for suggestions and comments from the public and conducted online surveys.

The report lays out many concerns of both lenders and borrowers.

“In the view of these [lender] attorneys, the cases are simple: one party provided money, the other promised to repay the money. They didn’t. As a result, the lender has the right to take their house,” the report reads. It also notes that lenders are losing millions of dollars in the foreclosure crisis.

On the other hand, the report notes that borrowers contend that “injustice is occurring because so many borrowers are unrepresented and so completely out of their depth in dealing with servicers and lenders.”

The report also notes that in many instances, settlement negotiations are not being handled by the firm litigating the foreclosure, which could add to confusion on the part of the borrower.

Among other problems, the task force spells out instances in which borrowers have fallen prey to foreclosure defense or workout scams — in which they pay money thinking a foreclosure rescue firm can help them out, but in fact nothing is done.

The task force also expressed concern that the large case load is interfering with a judge’s ability to “police the conduct of the firms in the unconstested, unopposed foreclosure cases.” It argues that judges should take every step to ensure that the original note is being produced in cases.

In a number of cases, settlements are occurring after the court reaches a resolution.

Bookman said different circuits could choose their own mediation management programs — they don’t have to use the Collins Center, a nonprofit handling mediation for the First, 11th and 19th circuits to mediate all foreclosure cases. It costs $750 per case, which is paid upfront by the lender.

“We feel that while the Collins Center is doing a great job, we’re not saying, ‘OK, you have to use the Collins Center,’” Bookman said.

Once the residential foreclosure is filed, the clerks offices would forward the information to the selected managed mediation program.

The mediation cost would be another burden shouldered by lenders, already paying a more expensive filing fee established by the Legislature. The mediation cost, estimated to run about $750, would go to the mediator, the service that handles it, and a financial counselor for the borrower. If the borrower never shows at the mediation, the lender can get part of its money back.

The task force notes that the settlement rate as a result of mediation in all three circuits is about 73 percent.


Problems identified by the Supreme Court’s foreclosure task force, and the proposed solutions:

Problem: Circuits around the state have developed a wide variety of responses to the foreclosure crisis

Recommendation: The state should strive for uniformity of forms and procedures statewide. Emphasis should be on settlements and for uncontested cases to be moved quickly through the system.

Problem: A hodgepodge of efforts to address foreclosures resulted in incomplete information online, necessitating borrowers to contact a variety of Web sites or sources to obtain necessary information.

Recommendation: The state should create a central statewide foreclosure Web site to give all Floridians access to foreclosure information.

Problem: Florida borrowers are being victimized by foreclosure rescue scams and attorneys who take their money but don’t defend the case.

Recommendation: The state should distribute consumer education on foreclosure scams and The Florida Bar should aggressively prosecute attorney misconduct.

Problem: Most lenders no longer maintain the loan documentation at their home facility and foreclosure actions are being filed without the original note being provided to counsel.

Recommendation: Plaintiffs must, at the time of filing, show they are the owner and holder of the note, and pass that information along to the court.

Problem: Both sides complain of an inability to get in touch with each other.

Recommendation: Mandatory managed mediation in homestead cases prior to a final hearing, with the lender paying for it. The borrower must also provide all financial information to the lender before mediation.

Jordana Mishory can be reached at (954) 468-2616.

3 responses to “Roy Oppenheim is quoted in the Daily Business Review on the Final Report from the Florida Supreme Court's Foreclosure Taskforce”

  1. […] Roy Oppenheim is quoted in the Daily Business Review on the Final … […]

  2. CHARLIE GOOD says:

    Mortgage servicers who do not own first mortgages, but do own second mortgages and/or HELOCs, have an inherent conflict of interest when they work unilaterally with borrowers in trying to modify mortgages. They have biased mortgage modifications in their favor by refusing to consider reductions of principal. This results in victimization of both first mortgage owners and borrowers by unnecesarily forcing properties into foreclosure. Ironically, foreclosure is not effective in protecting the interests of mortgage servicers in these kinds of situations.

    Successful resolution of more than 70% of mediated cases, versus results obtained by mortgage servicers, demonstrates the failure of mortgage servicers to effectively address mortgage modifications.

    I do not know the percentage of problem mortgages that fall into the category I have specified above. I only know that my wife and I have been unsuccessful in trying to resolve our problem by working with a mortgage servicer.

    Respectfully, Charlie M. Good

  3. […] example: In a recent article in the Daily Business Review about the Florida Supreme Court’s foreclosure task force Oppenheim commended the task force for recommending mandatory […]