A task force was formed to address the crises and they identified lack of communication between the parties as the most significant issue. The Florida Supreme Court addressed this issue by requiring mediation in all foreclosure cases involving homestead property unless the parties agree otherwise or have already participated in mediation.

The mediation will be handled by a Florida Supreme Court certified mediator appointed by the Court. The costs of the mediation will be paid by the lender and the total cost may not exceed $750. The plaintiff (lender) must have a representative who has full authority to settle at the mediation but they may appear by telephone or other electronic method.

The homeowner must provide financial information to the mediator and meet with an approved foreclosure counselor prior to mediation. They may also request certain information from the Company suing them before going to mediation.

The mediation manager must schedule mediation no earlier than 60 days and no later than 120 days after the foreclosure is filed.

The program is being implemented in each Circuit Court and right now the Seventh Circuit and the Fourth Circuit (Duval, Clay and Nassau Counties) have not implemented the managed mediation program. The Supreme Court just authorized the program on December 28, 2009.

Now back to the question if the program will help foreclosures in St. Augustine. I would hope that if a lender has options to foreclosure such as a loan modification, they would see the benefit of modifying the loan rather than incur the cost of mediation and the cost of foreclosure. I would also hope that short sales would become another viable option and lenders would be more cooperative in approving and closing a short sale rather than face mediation and foreclosure.

As you can see, I don’t have the answer yet. I will keep you updated as the program gets implemented in our area and we see the results.

Many people don’t understand how foreclosures work. Foreclosure is a process with four phases.

1. Default – You must miss a payment or more likely several payments to be in default. You may also enter the foreclosure process if you miss payments to a local taxing authority, a condo association or a homeowners association.
2. Legal Notice – The lender or foreclosing party must notify the owner that they are entering into the foreclosure process. In Florida they file a Notice of Lis Pendens. The owner will be personally served with the document and/or the foreclosure will be published in accordance with the local statutes.
3. Bank Sale or Auction Date – In Florida a Judgment of Foreclosure is filed that sets a sale date. The full amount due including penalties will be listed in the Judgment. On the sale date the property will be sold at the County Courthouse.
4. Redemption Period – The redemption period is the time during which the homeowner may present payment and regain possession of the property. After the sale in Florida, the Certificate of Title can be issued after 10 calendar days.

There are 9 solutions to Foreclosure that I will discuss in my upcoming blog. Call a CDPE (Certified Distressed Property Expert) in your area to discuss ways to prevent your property from foreclosing.

She told me a story about a recent transaction she had done with her teammates, Juana Hausted and Pauline Cake, to show me how it works with the help of a professional. A Navy officer couple came to her when they were transferred from Florida to Virginia. They had bought a house they loved in World Golf Village three years ago, but the housing allowance wasn’t enough to keep it after their move. Mirtha explained they tried to modify their loan first. However, the lender refused to work with them. Since they were upside down on their mortgage by $100,000 and a foreclosure would cause them to lose their military clearance, she suggested a short sale to them. She immediately contacted their lender so they could work together on selling the home. Being a CDPE, Mirtha was educated on the proper procedures to start the process.

After doing her due diligence, Mirtha recommended pricing the home aggressively, which would save time and assist with an acceptable appraisal. They agreed to her strategy and the home was listed one Friday afternoon. After a flurry of showings over the weekend, a full price offer was received on Monday morning. The short sale package was submitted to the lender and a bank negotiator was assigned to the file. Again, this went smoothly because of her experience with short sales. The following week an appraisal was done and shortly thereafter the bank approved the offer via a short sale approval letter, which forgave the difference between the purchase price and the mortgage amount. The home closed two weeks later. Needless to say, the Navy couple was ecstatic – the financial burden was lifted and the future of their careers’ was safe. With so many people facing foreclosure, it is nice to know there are other options available and professionals willing to share their expertise. If you need help with foreclosures in Jacksonville or any other difficult mortgage situation, please  talk to a professional who can help! Call us at 800-940-2898.