Yesterday, Hon. Thomas McGrady announced that the new foreclosure mediation program in Pinellas County will go on-line July 1, 2010.

The Sixth Circuit leads the country in developing solutions to the foreclosure crisis and this program has real hope of alleviating the pressures placed on the courts.   The staff is in place, the infrastructure is in place and now the only real question is….

WILL THE LENDERS PARTICIPATE IN GOOD FAITH IN MEDITATIONS?

Mediation provides real hope for courts and for homeowners, but meditations results so far have had very mixed results.   For consumers and practitioners, you must understand the new rules because this is not the same relatively unstructured meditations we’ve been used to in the past.   There are new rules and requirements that must be understand and used effectively.   The Pinellas County program should be recognized for the attention the Chief Judge to making sure borrower’s rights are respected and I have every confidence that this program will be effective for consumers…..as long as the lenders come to the table with real solutions that recognize the new economic realities.

The bottom line is ethical and responsible foreclosure defense attorneys need to get behind this program and learn how to use it to help our clients and be part of the solution to the problem.   The primary thing we need to be on the look out for is lenders and attorneys bullying consumers and not providing the disclosures that the new program requires.   Also, we all need to recognize that consumers may be contacted with details of Mediation even before they are served with the foreclosure lawsuit.

I’m pleased to report that the program managers have agreed to meet with members of the Foreclosure Defense Bar and in previous meetings, they have made it very clear that they will be meeting and working very closely with both defense and plaintiff’s attorneys to help make sure the program is a success.

The roll out of these foreclosure meditations and how we need to be preparing for them will be a major focus of today’s Foreclosure War Room!

Pinellas and Pasco begin new program designed to avoid foreclosure suits

By Curtis Krueger, Times Staff Writer
In Print: Thursday, June 24, 2010

A homeowner and a banker sitting down at a table “” sometimes that’s all it takes to stop a foreclosure lawsuit.

Now the court system for Pinellas and Pasco counties has set up a program designed to bring bankers and lenders together with certified mediators. The plan is designed to cut down on the thousands of people in danger of losing their homes.

“We have 33,000 open mortgage foreclosure cases,” Pinellas-Pasco Chief Judge Thomas McGrady said Wednesday. McGrady said the cases are “having an adverse effect on our economy, on our tax base, on the conditions of our neighborhoods” and much more.

The program begins July 1 and applies to homeowners in danger of foreclosure on their primary residences who meet certain other criteria. Homeowners don’t have to participate. But if they want to, their mortgage companies are required to participate, under an administrative order signed by McGrady.

All court circuits in Florida are required to set up similar programs, under a directive from the state Supreme Court.

For people with foreclosure cases filed after July 1 in Pinellas or Pasco counties on homes for which they have a homestead exemption, the program will work like this:

“¢ A mediator will be appointed by Mediation Managers, a St. Petersburg-based nonprofit.

“¢ The lender will be required to pay a $750 fee. If the mediation does not go in the homeowner’s favor, the fee will be added to the final judgment in the foreclosure case.

“¢ In the mediation, the lender and homeowner can talk about various alternatives to foreclosure, such as modifying the terms of the loan, or a “short sale.” Financial counseling also will be offered to the homeowner.

Jack L. Townsend Sr., business manager for the mediation firm, said lenders are sometimes so overwhelmed by foreclosure cases that they can’t offer this kind of individual attention. He said he believes the program could help a high percentage of homeowners who qualify.

But Matthew D. Weidner, a lawyer who defends homeowners, said it will work only if lenders make a good-faith effort to participate. He fears some lenders may simply go through the motions.

To learn more, call Mediation Managers (727) 475-4944 or go to mediationmanagersinc.com.