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Florida Supreme Court Terminates Mandatory Foreclosure Mediation Program
By Meghan S. Musselman

On December 19, 2011, the Florida Supreme Court issued an Administrative Order terminating the statewide Residential Mortgage Foreclosure Mediation Program (“RMFM Program”). The court said that, based on reports it had reviewed, “it cannot justify continuation of the program.”

The Florida high court created the RMFM Program in December 2009 in response to the high volume of pending foreclosure cases in Florida. Under the RMFM Program, all foreclosure cases involving residential homestead property were required to be referred to mediation.

The Assessment Workgroup for the Managed Mediation Program for Residential Foreclosure Cases submitted a report to the Florida Supreme Court in October 2011 recommending termination of the RMFM Program. According to the Workgroup, the RMFM Program was not successful in reducing the backlog of foreclosure cases. According to public comments, servicers did not comply with the requirement to send to mediation representatives with full authority to settle, and further, considered only a narrow range of settlement options. Further, due to lack of publicity about the Program, borrowers mistrusted the Program and were not convinced of its legitimacy.

Cases that have already been referred to or are pending in the RMFM Program will remain in the Program until mediation has been completed. Any cases filed on or after December 19, 2011 will not be referred to the RMFM Program.

However, the Florida Supreme Court left the door open for the circuit courts to continue to refer cases on a case-by-case basis: “Circuit chief judges are vested . . . with responsibility for the administrative supervision of their circuits. [The] Florida Statutes authorize circuit chief judges ‘to do everything necessary to promote the prompt and efficient administration of justice.’ These authorities empower the circuit chief judges to adopt or employ any measures permitted by statute or court rule to manage pending and new residential mortgage foreclosure cases, including referral of cases to mediation on a case-by-case basis . . . .”

As of the date this article was written, the following eight Florida circuit courts had issued orders terminating the RMFM Program - 1st Circuit (program continues 90 days from 12/19/11); 2nd Circuit (end date 12/20/11); 6th Circuit (end date 12/20/11); 7th Circuit (end date 12/20/11); 8th Circuit (end date 12/29/11); 14th Circuit (end date 12/20/11); 18th Circuit (end date 12/19/11); 20th Circuit (end date 12/20/11). The remaining twelve circuits, including the circuits covering Miami and Orange County had taken no action and appear to be continuing the RMFM Program. Both Miami and Orange County had mediation programs in place prior to the initiation of the RMFM Program, so those circuits may resume their prior mediation programs.

Meghan S. Musselman is a partner in the Maryland office of Hudson Cook, LLP. Meghan can be reached at 410-865-5403 or by email at mmusselman@hudco.com.

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