One of my asset protection client introduced me to an attorney in Tampa, named Mike, who has a very large and successful practice defending mortgage foreclosures and negotiating mortgage modification. I spoke with Mike and asked him about his client’s experiences during court-ordered mediation with their mortgage lender during foreclosure litigation.
Mike said that mediation in state court proceedings is usually a waste of time for his clients. He listed several reasons why foreclosure mediation infrequently results in successful mortgage modification and foreclosure forbearance. For example, he said that there are so many foreclosure mediation that lenders usually send a foreclosure “clerk” with minimal authority to offer anything other than the lenders “in-the-box” standard modification packages for which, he said, few clients qualify. He said that the lender’s attorney see mediation as a temporary hurdle in their march toward foreclosure judgment and possession of the property. There are so many different state court judges with their own procedures that there is little uniformity how trial court’s treat mediation.
Mike said he is having success in mediation ordered by the appellate court. When an appeal is filed our appellate court (the Fifth District Court) orders almost all foreclosure cases to mediation. No briefs are due until mediation is completed. The attorney says lenders send more senior representatives to appellate mediation and they take more seriously mortgage mediation ordered by an appellate court. Appellate mediation is uniform because there is just one appellate court in our district.
The challenge is getting a foreclosure case to the appellate level. Mike lays the groundwork for appeal in response to lenders’ motions for summary judgment. He says that most trial courts ignore technical defects in lenders’ summary judgment motions because the trial judge wants to move his large foreclosure docket and get cases to their inevitable conclusion of a foreclosure judgment. Trial judges do not scrutinize foreclosure summary judgments as closely as they do in a typical civil case, according to Mike. Mike says that he uses technical summary judgment defenses which he anticipates may be overlooked by the trial court judge, but these technical defenses if ignored are the basis for an appeal. His clients can file and appeal and get to appellate mediation for a relatively small investment in legal fees.
I posted a blog article earlier this week about prospective bankruptcy court mediation in Chapter 13 cases. It will be interesting to see if bankruptcy mediation is, like appellate mediation, a better forum to negotiate mortgage modifications.