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- by By Todd Ruger
  
Mediation for homeowners

 
Troubled homeowners in Sarasota and Manatee counties will soon be guaranteed a meeting with lenders to try to save their properties from foreclosure.

Every homesteaded property will be referred to a new mediation program under a Florida Supreme Court order, and the lenders will have to pick up the cost.

The homeowners will get credit counseling, as well as a trained mediator to guide the meeting with the lender about short sales, loan modifications or other alternatives to foreclosure.

"It's one more layer of protection from the unnecessary loss of the home," said Elizabeth Boyle, a lawyer with Gulfcoast Legal Services in Venice. "It's a large step forward for homeowners."

The program could resolve more foreclosure cases before they end up in the courts, where they are clogging civil dockets.

One of every 19 homeowners in Manatee and Sarasota counties received a foreclosure notice last year, a total that pushed Florida to third in the nation for its distressed property rate.

Twelfth Circuit Judge Lee Haworth is reaching out to the community to figure out how to start the new mediation program in Sarasota, Manatee and DeSoto counties.

When it starts, which could be as early as April, the mediation program would replace or work in tandem with rules Haworth had created to get lenders talking with homeowners.

The program will reach out to homeowners in foreclosure and help them exchange financial information with the lenders.

The main hurdles to starting the new program: it must be run by a proven nonprofit group that is politically and professionally neutral, and there are upfront startup costs.

For anyone looking to take on the task, the "good news" is "there will be no shortage of clients," Haworth wrote in a letter to the legal community.

"We expect the flood of residential foreclosure cases into our civil divisions to continue through 2010 and into 2011, so there should be thousands of cases eligible for mediation," Haworth wrote.

The program requires the lender seeking to foreclose on a homesteaded property to pay the $750 cost. That is expected to give lenders more incentive to take the meeting with homeowners seriously and avoid the foreclosure going through the court system.

There are questions about how effective the program will be.

A leading real estate expert, Jack McCabe, says homeowners might get a loan modification through mediation, but many slip back into foreclosure in less than a year because lenders are not reducing the amount owed.

Half the state's mortgages are for more money than the property is worth, and could stay that way for the rest of their owners' lives, McCabe said.

"They're upside down and they're getting deeper in debt," McCabe said. "We're going to continue to see this high and escalating number of foreclosures."

The new program grew out of the work of a state task force, which sought to ease the crush of foreclosure cases overwhelming the state's court system.

Haworth, a member of that task force, had already put in new local rules requiring attorneys for lenders to meet with owners of homesteaded property, but a mediator was not present.

Linda Harradine, the director of Legal Aid of Manasota, said the program should be tried but it is not clear how much more successful it would be.

"My question had been: Will this provide better results because that third party is there?" Harradine said.

Haworth said he would have ordered mediators to cases a long time ago, but had no way to pay for it until the state Supreme Court's program.

"They don't work for free," Haworth said of mediators. "With the injection of a Supreme Court certified mediator, it will have better results, more successes, than we would have without a mediator in the mix."

Source: http://HeraldTribune.com