The 16th Judicial Circuit of Florida, which comprises Monroe County, and which has Key West as the County Seat, has developed a procedure contained in Administrative Order 300.5 for handling residential foreclosure case filed in the county. If more Judicial Circuits and States would adopt rules such as these, a sense of normalcy might return to the foreclosure arena.
Briefly, the Administrative Order requires several things to occur when a residential foreclosure is filed in Monroe County.
First, (except under specific circumstances) the case is immediately referred to the Mediation Program unless the plaintiff and borrower agree in writing otherwise or unless pre-suit mediation was conducted. This means that before the Lender can get a Default Judgment against the Borrower, they must go to Mediation.
Second, before the plaintiff applies for default judgment, a summary judgment hearing, or a final hearing the parties must comply with this Administrative Order, and the mediation process must be completed unless a notice of nonparticipation is filed by the Program Manager.
Third, the plaintiff must attach to the summons to be served on each defendant, a notice regarding managed mediation for residences in the format required by the Court so that the borrowers know about the Mediation process.
Fourth, it is the responsibility of the Lender’s Attorney, at the time the foreclosure suit is filed to file a form with the clerk of court that is completely filled out, and to electronically transmit a copy of this Form to the Mediation Program Manager along with the case number of the action and current and complete contact information for all of the parties. The contact information must include all contact information for all parties. Failure to comply may results in an Order to Stay Proceedings, sanctions, dismissal and/or a finding of contempt.
In this Form, plaintiff’s attorney must affirmatively certify whether the origination of the note and mortgage sued upon was subject to the provisions of the federal Truth in Lending Act, Regulation Z. In Form A, plaintiff’s counsel must also affirmatively certify whether the property is a homestead residence. Plaintiff’s counsel is not permitted to respond to any request on this Form with “unknown,” unsure,” “not applicable,” or similar nonresponsive statements.
Now here’s where the teeth of the Rule come in. The Plaintiff’s Attorney must provide the borrower with all of the following information and documents from the plaintiff:
a) Documentary evidence the plaintiff is the owner and holder in due course of the note and mortgage sued upon;
b) A history showing the application of all payments by the borrower during the life of the loan;
c) A statement of the plaintiffs’ position on the present net value of the mortgage loan;
d) The most current appraisal of the property available to the plaintiff.
Fifth, at the Mediation, there as to be present (either in person or if by conference call [which has to be noticed at least 5 days prior to the Mediation]) the following people:
- Lender’s Attorney
- Lender’s Representative with the most recently filed form containing the information previously supplied to the Borrower who must have full authority to settle the case.
- Borrower’s Attorney if they have one
If at the beginning of the time scheduled for mediation, any one of the parties are not present either in person, or by electronic means, or if the Mediator determines that the Lender’s Representative does not have full authority to settle the foreclosure, and must remain on the communication equipment at all times during the entire mediation session. If anyone appears electronically, they must have access to a facsimile machine.
So what happens if the borrower fails to appear at Mediation? The Lender gets to proceed as they normally would throughout the litigation process and access attorney’s fees and costs.
What happens if the Lender’s Attorney or the Lender’s Representative with full authority to settle fails to appear at Mediation? The Court can dismiss the Foreclosure Suit without prejudice (meaning they can refile it later) or impose other sanctions such as accessing attorney’s fees and costs if the borrower is represented by an attorney.
The Mediator files a report after the mediation, telling the Court whether the matter has been resolved, or if the parties are at an impasse. All communications during the Mediation, other than the Report to t he Court, are confidential and inadmissible in any other Court Proceeding.
But what about the Cost? The entire cost of Mediation (which remember, is required) is borne by the Lender. They must pay $400.00 when they file the foreclosure action, and a balance of $350.00 within ten days after the Mediation is concluded. There is absolutely no cost to the borrower. These fees cover the cost of the Mediation session, the Mediator’s fees, the cost for the borrower to attend a counseling session with an approved mortgage foreclosure counselor, the cost of administering the Deed in Lieu Program and the Short Sale Program; and the cost to the Program Manager for administration of the managed mediation program which includes but is not limited to initial outreach to the borrower, providing neutral meeting and caucus space, scheduling, telephone lines and instruments, infrastructure to support a web-enabled information platform, a secure dedicated email address or other secure system for information transmittal, and other related expenses incurred in managing the foreclosure mediation program.
If you are an attorney who is filing 5 or more foreclosure cases in the county in a three month period, then you have some additional responsibilities. You have to appoint two mediation Program liaisons, one of whom has to be a lawyer and the other a representative of the entity servicing the plaintiff’s mortgages, if any, and, if none, a representative of the plaintiff. The Lender’s Attorney must provide written full contact information of both liaisons to the chief judge and the Program Manager, update that information. The liaisons shall be informed of the requirements of this Administrative Order and shall at all times be capable of answering questions concerning the administrative status of pending cases and the party’s internal procedures relating to the processing of foreclosure cases, and be readily accessible to discuss administrative and logistical issues affecting the progress of the plaintiff’s cases through the RMFM Program. Plaintiff’s counsel shall promptly inform the chief judge and Program Manager of any changes in designation of the liaisons and the contact information of the liaisons. The liaisons shall act as the court’s point of contact in the event the plaintiff fails to comply with this Administrative Order on multiple occasions and there is a need to communicate with the plaintiff concerning administrative matters of mutual interest. Failure to appoint liaisons shall result in sanctions.
The Administrative Order also gives the lenders and borrowers the option to mediate prior to filing if they so chose.
The Chief Judge’s Order also provides all the forms that they parties need during this process, so there aren’t any excuses, that someone didn’t know what kind of form to file, or by filing some different alternative type of form that tries to skirt some important issue.
What this means to you as a homeowner. Firsts, you get to have mediation with someone who can make a decision that will bind the bank. In addition, the lender pays the entire cost of the mediation. Second, the Court is requiring, a large amount of Discovery to be done, when the case is filed, rather, than requiring the homeowner to ask for it, and then waiting and waiting for the Lender’s Attorney to come up with the paperwork. If they don’t have the paperwork, they can’t even file the foreclosure case. Third, “foreclosure mills” have to provide a point of contact for your case. They shouldn’t be any long waits on hold while the person handling your case is looked up and located. Finally, if the lender doesn’t comply, the case gets thrown out, or the Attorney is sanctioned.
We should make this a model for every Court district in the US. It would cut down on those cases where no paperwork, or bogus paperwork is submitted with the complaint, it provides and non-judicial path of resolution for both parties, and it establishes a path of communication between all the parties.
Let’s make this happen nation-wide.