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Fighting foreclosures with mediation

MANATEE — A pair of efforts to resolve foreclosure cases more quickly is about to be implemented in Manatee, Sarasota and DeSoto counties.

Certain foreclosure lawsuits filed in the 12th Judicial Circuit soon will be subject to mandatory mediation, the area’s top judge said. He also said local court officials will begin using additional state money toward reducing the backlog of pending foreclosure cases.

“I’m optimistic that we’ll finally make some real progress,” Chief Judge Lee Haworth said. “We have a great opportunity here to make the court system operate more efficiently and reduce the backlog.”

In mediation, a neutral outside party tries to get both sides in a court case to reach a settlement. In December, the Florida Supreme Court ordered all 20 state judicial districts to enact the foreclosure mediation program in hopes of helping more borrowers keep their homes and easing the court backlog.

Lenders and servicers have filed more than 1,900 foreclosure suits in Manatee County Circuit Court so far this year, accounting for roughly 40 percent of all civil cases, court records show. A record 6,390 foreclosure suits — about half of all cases — were filed last year, according to the Manatee County Clerk of Court.

Haworth issued an administrative order last month that will implement the local mediation program June 21, which will make his circuit the seventh to do so, according to the State Courts Administrator’s office.

From that date forward, all foreclosure suits targeting homesteaded properties in the circuit’s three counties will be referred to mediation, unless both sides agree to waive it. The requirement won’t apply to suits against commercial or nonhomesteaded properties, or those seeking to foreclose on homeowner or condominium association dues or construction and mechanic’s liens.

The Collins Center for Public Policy and the University of South Florida’s Conflict Resolution Collaborative will manage the local mediation program.

Collins, based in Tallahassee but with an office in Sarasota, will notify homeowners of the program and offer referrals to foreclosure counseling that is required for borrowers to participate in mediation.

Borrowers also must provide financial information to Collins and can request certain records from the lender in preparation for the mediation session, which must be held 60 to 120 days after the suit was filed. The first sessions won’t be held until late August, said Gregory Firestone, the USF center’s executive director and the local mediation program’s lead manager. “There is a lot that has to happen before the mediations get scheduled,” he said. “Being in the program doesn’t mean you go into mediation right away.”

The USF Center will train the mediators who will oversee the sessions. Lenders and servicers will pay the cost of the mediation process, which is capped at $750 per case. If mediation is unsuccessful, the lender or servicer can seek to recoup that money in a foreclosure judgment.

Dawn Bates-Buchanan, managing attorney of Gulfcoast Legal Services’ Bradenton office, said the program could ease borrower frustrations in trying to work things out with their bank. Lenders must be represented at the mediation by someone with decision-making authority. “I’m excited,” she said. “I’m impressed, but we’ll have to wait and see how it plays out, whether lenders and banks play by the rules.”

Bates-Buchanan also said the program will provide greater protections for borrowers. For example, mediators who spot fraud or predatory lending in loan documents will be required to encourage borrowers to seek an attorney.

Both Firestone and Haworth cautioned the program will take time to become effective. “As we gather steam and things become more organized and focused, we’ll get better results coming out,” Haworth said. “But at first it’s going to be a little slow.”

His circuit also will receive $212,000 in state funding to use toward reducing the backlog of foreclosure cases. With the money, Haworth plans to hire three or four case managers and have more judges hear foreclosure cases.