Article Courtesy of The Orlando
By Mary Shanklin
Published January 17, 2012
For three days starting Tuesday, Seminole County Chief Circuit Judge Alan Dickey has scheduled 300 foreclosure cases.
"If everybody shows up, I'll have about 30 seconds a case," said the judge, who expressed disappointment with the state Legislature's decision to end funding for retired judges who were helping deal with a growing backlog.
One day in early October, Dickey processed about 125 foreclosure cases an hour throughout the day, the judge's assistant said. Many of those, she added, were dismissed or continued.
From the summer of 2010 through this past summer, the state paid retired judges to tackle a backlog of hundreds of thousands of foreclosure cases across Florida. During much of that time, it just so happened that banks cut back on foreclosure cases because of concerns about illegal documents.
But now — six months after the state ended its $6 million program — foreclosures are on the rise again. A report released last week by real-estate-research company RealtyTrac Inc. showed that the number of houses repossessed by banks last month in Metro Orlando was 1,094 — up 56 percent from November. And the court actions were on the rise for several months preceding that.
So now the state's courts have fewer judges and more foreclosure cases.
"We're just pushing the cases through," said Dickey, adding that he had "no idea" about the size of the foreclosure backlog in Seminole County. During the time when the state paid retired judges $350 a day to hear foreclosure cases, the court circuit for Seminole and Brevard counties cleared all of its related cases. But in the three months since the program's July 1 demise, the clearance rate dropped to 86 percent.
The news is also not good for homeowners, especially considering that the state also dropped its mandate last month for foreclosure mediation.
"Most of the borrowers — maybe 95 percent — don't have representation," said dispute-resolution expert Sandra Upchurch, who administered the state foreclosure mediation in Volusia County courts. "Many made bad decisions, and some loans have legitimate problems. But if borrowers have no lawyers, the cases aren't being argued. And those cases are going to get opened and closed in 30 seconds, and those buyers don't have a chance."
The Florida Supreme Court ended the mediation mandate after reports showed it was largely ineffective, with few homeowners participating and even fewer being able to keep their homes. According to the Office of the State Court Administrator, almost 67 percent of cases mediated from March 2010 to March 2011 did not result in any sort of agreement between the borrower and the lender.
Some experts, though, say mediation is crucial. A recent U.S. Justice Department report concluded that mediation can resolve more cases — if the programs are structured effectively. It also noted that court systems need better ways to measures such programs' success. And U.S. Rep. Frederica Wilson, D-Miami, has introduced legislation proposing the Mandatory Foreclosure Mediation Act.
Leanne Levett, a certified mediator in Winter Park and founder of a foreclosure-mediation nonprofit called Earth Angels United, says that about half the mediated cases in Seminole County courts are resolved in a way that allows the homeowners to keep their residence. Even though the other half are settled in favor of the bank, the homeowners may sometimes leave the house without the added burden of unpaid mortgage debt.
Without a federal- or state-level push for banks and homeowners to mediate foreclosures, it's now up to individual judicial circuits to figure out what — if anything — should be done about foreclosure mediations. Some circuits, such as the one for Volusia, have no plans to ensure that banks offer mediation. Others, such as Seminole, are going to continue mandating mediation.
In Seminole, Dickey said, mediation gives homeowners a chance to sit down with a lender to make sure everyone is communicating and getting the necessary documents.
"Banks were filing foreclosures because they hadn't been paid, and the average person does not know what to do," the chief judge said. "Papers come to the owners, and they're written in legalese. And here are a bunch of people with no lawyers, and they were coming in and saying, 'I don't want to lose my house
-- what should I do?' "
As for backlogs, foreclosure cases that are mediated generally get through the court system almost immediately, said Upchurch, the Volusia mediation administrator. But banks are still slow, she said, to get home repossessions finalized.
"Attorneys for the banks are not processing those cases," she said.