In December 2009, the Florida Supreme Court issued an Administrative Order mandating mediation in all residential foreclosure actions filed on homestead property. If a defendant is not automatically eligible for mandated mediation, the defendant may motion the Court to participate in mediation.  In these cases, our firm negotiates with the defendant to hold mediation outside the mandated mediation process or to hold a telephone conciliation conference.

The mandated mediation process is administered by various non-profit program managers in each of the twenty circuit courts of Florida. The Administrative Order allows the program manager up to 120 days after the complaint is filed to schedule the mediation.  The process is laden with deadlines, disclosures, and forms for the plaintiffs, defendants, and program managers. Non-compliance by any of the participants causes additional delays, and can result in court ordered sanctions. 

The mandated mediation process is focused on resolving the default.  The process requires the defendant to provide complete financial documentation and to attend financial counseling. It also requires the plaintiff to provide documentary evidence that plaintiff is owner and holder of note and mortgage, loan history showing application of all payments made by borrower during life of loan, statement of Plaintiff’s position on the net present value of loan, and most current appraisal of property available to plaintiff.  Typically, the mediation results in an impasse because the parties are unable to resolve the default. The most common reasons for impasse are that the lender has reviewed the borrower documents and the borrower does not qualify for a loan modification, or the borrower does not provide complete documentation in order for the lender to make a decision. 

In April 2011, the State Courts Administrator issued its first statewide report on mandated mediation. It reported that only about four percent of the 57,909 foreclosure cases referred to mandated mediation between March 2010 and November 2010 resulted in agreement between the borrower and the lender.