In a move that has left local courts rushing to restore the voluntary consultation process before 2009, the Florida Supreme Court has announced the ending of the state's mandatory mediation program. Homeowners facing foreclosures that have applied for and are currently awaiting mediation will be able to complete the program, but the program will not take on any new applicants. This leaves hundreds across the state with one less possible option for foreclosure defense.

Since it was initiated soon after the recession began in 2008, only 3.6 percent of the 78,076 total Florida foreclosure cases that were eligible for mediation resulted in settlement. Those that did qualify resulted in deed-in-lieu foreclosures, loan modifications or short sales.

Banks and attorneys disagree regarding why the program failed to live up to its goals. An executive with the Florida Bankers Association called the mediation a "well-intended program that just didn't pan out." He added, "We don't want to foreclose. That's not good for anyone." Meanwhile, attorneys say lenders were largely unwilling to cooperate with mediation. One lawyer argued that while the program was destined to fail some percentage of borrowers, it resulted in lenders "not acting in good faith negotiations."

Officials and judges say that a combination of those factors likely led to the programs demise, as well as other problems. For instance, mediators frequently had trouble contact default borrowers and the bank representatives who appeared at mediation sessions often were not authorized to negotiate the matters that arose during negotiations. Regardless of the program's fate, the director of the Conflict Resolution Collaborative at the University of South Florida said it allowed those involved to begin discussing the problem of foreclosure. He explained that, "the program had a great value to the community in so many ways."

Source: Brandeton Herald, "Foreclosure mediation program falters," Josh Salman, Dec. 21, 2011