8/7/2019 Foreclosure Crisis _ Florida Mediation process and the
inability of the bank to show the note.
1/1
Foreclosure crisis: Lenders holding back critical information at
mediations
BY DIANE C. LADE
A fraction of South Florida foreclosure cases referred to
mediation are ending in written agreements between homeowners and
their
banks. One reason: Some lawyers say lenders are refusing to
provide court-mandated documents showing they own the loan and
itsnet value, or are filing faulty paperwork.
While mediations can proceed without the papers, foreclosure
defense attorneys say borrowers then go in without information
critical
to saving their homes.
Margery Golant, a South Florida attorney, said 10 recent
mediation sessions set for her Broward and Palm Beach County
clients had
to be canceled because the lenders either didn't send what are
called plaintiff's disclosures or the documents were flawed.
Lenders or
their loan servicers are required to produce the disclosures
five business days prior to mediation in Broward and 10 business
days inPalm Beach County.
"If the borrowers don't comply, they get kicked out of the
program. But nobody is cracking down on the plaintiffs. I think
that, in a
nutshell, is why the mediation results have been so dreadful,"
Golant said. A December analysis released by the Florida
SupremeCourt showed about 6 percent of cases referred to mediation
statewide result in written settlements for homeowners, although
not all
circuits were included in the calculations. In Broward last
month, 12 percent of mediations ended with written settlements; no
figures
are available for Palm Beach County.
The state's analysis did not show how many mediations had been
canceled. It's also unclear how many mediations may have been
waylaid by paperwork-filing delays.
Attorneys at Coast to Coast Legal Services of South Florida who
are working with senior citizens facing foreclosure say they've
alsohad problems with the disclosures. "I have yet to see [lender
representatives] come to mediation with any type of document that
shows
they own the note," said attorney Gladys Gerson.
In some cases, her unit has canceled hearings and filed court
motions to force loan servicers to give them the paperwork.
Canceled
mediations can be rescheduled.
Attorney Gerald Richman who represents Shapiro & Fishman,
one the largest Florida firms representing mortgage lenders with
an
office in Boca Raton said disclosure problems stem from loan
servicers being overwhelmed, not a desire to thwart mediations.
"The paperwork is not easy to find and not always that clean. It
takes time," he said, noting that concern over faulty documents
also
has slowed court filings. He questioned if missing disclosures
were a factor in failed mediations, saying the loan servicers'
limited
authority to substantially modify a loan was a far larger
problem.
About 100,000 homes in Broward and Palm Beach counties were in
some state of foreclosure in 2010. It was estimated at the end
of
2010 that there were 350,614 foreclosure cases backlogged
statewide. State figures show Broward County courts disposed of
3,784
foreclosure cases during the last three months of 2010, with
Palm Beach closing out 3,918. About 218,780 cases statewide
areconsidered inactive, meaning judges have not been able to move
them forward. The 2009 Florida Supreme Court order mandating
foreclosure mediation for residential homesteaded properties
states that borrowers have the right to ask their lenders for a
plaintiff's
disclosure before mediation. It can include four things: a
payment history, a current appraisal of the property, the bank's
estimate of
the mortgage loan's present net value, and documentary evidence
the bank owns and holds the mortgage note.
The last requirement is what's been bedeviling banks in recent
foreclosure cases, with the constant repackaging of mortgages
as
securitized investments scattering paperwork. In October, the
4th District Court of Appeal in West Palm Beach overturned a
lower
court ruling, saying that US Bank National Association could not
foreclosure on a Boca Raton couple's home because the lender didnot
show the original note.
But equally important is the appraisal and the net value
information, which helps gauge the loan's chances of being repaid.
Both areused to determine if people are eligible for the
federally-backed HAMP loan modification program. "So it's key to
know what numbers
the banks are using," Golant said.
She's concerned that homeowners representing themselves, the
vast majority in mediations, don't even know they can request a
plaintiff's disclosure. And those who ask but don't get them
won't have the legal expertise to challenge the banks, said Coast
to Coast
attorney Sarah Barker. Those running Broward and Palm Beach's
mediation programs, however, say disclosures are explained to
participants, and that the lenders are delivering them. Rebecca
Storrow, a vice president with the American Arbitration
Association
that manages Broward's mediations, said program counselors tell
homeowners about the disclosure request option in their initial
contact with them and later revisit the issue. "It's something I
feel strongly about," Storrow said. "In most cases, the lenders
provideit."
