In Florida, 1 in every 187 homes has received a foreclosure notice. This has created a backlog of homes for the foreclosure courts statewide. The courts face the daunting task of attempting to quickly move the foreclosed upon properties through the courts and back into the housing market.
In order to better manage this backlog of foreclosures, the Florida courts have adopted a mediation process recommended in a report submitted by a task force in August of 2009. The report concluded that the lack of communication between borrowers and lenders was a major contributing factor to the lack of settlement in these cases.
By requiring all residential foreclosure properties to go through a mediation process, the court has managed to improve communications between borrowers and lenders and achieve early settlements in cases that otherwise would have cost the courts more time. In a judicial system hit hard by shrinking state budgets and staff cuts, this type of efficiency is absolutely necessary. Abandoned and vacant homes are not subject to the mediation process and are moved quickly to the open market as bank owned or REO properties. Lenders attempting to cancel a foreclosure sale at the last minute must now give a more detailed explanation as to their reasons for the cancellation. All of this is in the interest of reducing the amount of time a foreclosed property sits in the court system.
Mediation can save the courts time and keep people in their homes. By providing lenders and borrowers the opportunity to settle early in the foreclosure process and by providing a free mediation service, the courts increase the chances a settlement can be reached before it is too late.