“The Mortgage Lender Won’t Talk To Me” The Florida Supreme Court Says That Banks Must Now Mediate Foreclosures

The biggest complaint I hear from clients facing potential home foreclosure is that they cannot communicate with anyone from their mortgage lender who has authority to modify their loan or otherwise help them avoid losing their home. People say, “I want to save my home but the bank won’t talk to me about a workable solutions.” The Florida Supreme Court is trying to improve this problem through required mediation. The current issue of the Florida Bar News reports that the Florida Supreme Court has approved a managed mediation program recommended by its Task Force created last year to help courts deal with Florida’s foreclosure crises.

The Task Force reported that lack of communication between banks and borrowers was the most significant problem in foreclosure cases. Under the new managed mediation program all residential foreclosure cases will be referred to mediation by Supreme Court certified mediators. The bank must pay all mediation expenses.

Court-ordered mediation requires that both sides, including the large mortgage lenders, have someone present at mediation with full authority to resolve the foreclosure dispute. If the mortgage lender does not have someone with full authority at mediation the court may sanction the lender. Mediation is probably your best opportunity to make a fair deal with your mortgage lender if a deal is possible in your case.

Mediation has some negative consequences for the borrower. There is no mediation unless there is first a foreclosure suit after the borrower has stopped making his mortgage payments. Usually, banks will not foreclose until mortgage payments are at least three months late. By then, the borrower’s credit rating will have declined, and the rating will decline substantially when the bank forecloses. So, if you want to use court ordered mediation to negotiate with your mortgage lender you first will have to sacrifice your good credit. Your credit score is your “equity” or “payment” toward the mediation settlement process.

I have told many of my clients that mediation is the best venue to negotiate mortgage solutions. This process will now be more readily available to homeowners as a result of the Florida Supreme Court’s managed mediation program.