By Annie Butterworth Jones
Associate Editor

As the housing crisis in Florida continues to worsen, the Task Force on Residential Mortgage Foreclosure Cases is clamoring to get its managed mediation program recognized by the Legislature.

At a Senate Judiciary Committee Meeting October 7, task force chair and 11th Circuit Court Judge Jennifer Bailey presented the panel’s final report, published on August 17. The report details a plan to alleviate the “traffic jam” that is Florida’s foreclosure cases.

“This problem goes beyond the courts’ discretion,” Judge Bailey admitted at the outset of her presentation. But with foreclosures taking up 75 percent of the courts’ dockets and 266,000 foreclosures already reported through August, task force members say an immediate solution is necessary for courts to begin handling the cases more quickly and efficiently.

“My expectation is that things will get worse before they get better,” said Sen. Joe Negron, R-Port St. Lucie, chair of the Judiciary Committee. “My goal in the upcoming session is to make sure that both lenders and borrowers have access to the court and that their due process rights are protected.”

Members of the task force believe one of the best ways to achieve that goal would be their proposed managed mediation program, which calls for differentiated case management and uniformity across the state.

Some, though, are questioning the cost and overall success of a managed mediation approach. Public comments found on the Florida Supreme Court’s Web site list expense and borrower involvement as primary concerns.

“This solution is far too complicated, expensive, and overreaching and will only cause further delay and backlog in the court system,” wrote Virginia Hiatt of Smith, Hiatt & Diaz in Ft. Lauderdale. “We propose one simple change: that the borrowers be required to opt in to the mediation process.”

Currently, the recommended program assigns principal cost to the lender. They must pay $750 for the mediation process, and all homestead exemption cases will automatically be referred to mediation, unless the lender and the borrower come to other terms.

“Our solutions were motivated by math and common sense,” said Judge Bailey. “Common sense tells us that if these homeowners don’t have money to pay for their mortgage, they probably don’t have money to cover mediation costs. Our research shows that lenders want this; they recognize the need for mediation.”

Pilot projects with managed mediation programs are currently running in the First, 11th, and 19th circuits with the help of the Collins Center for Public Policy in Tallahassee. The majority of cases reviewed by the program have been mediated successfully and quickly: most have moved in and out of the system in 120 days.

This type of efficiency is crucial since recent clerk layoffs are causing a strain on the courts, forcing many foreclosure cases to sit in the system for weeks and months at a time.

“We want to do everything we can to avoid vacant homes that deteriorate in value and hurt the neighborhood,” Sen. Negron said after the meeting. “We’re working and studying recommendations right now, and I would expect to see some legislative proposals by the end of the year.”

Public comments regarding the final report were due to the courts by Oct. 15 and can be found at www.floridasupremecourt.org. Oral arguments are scheduled for Nov. 4.