Claims And Issues

Mediation and Appraisal of Florida Property Insurance Claims.

    In a recent decision, a Florida Appellate Court was seemingly confronted with a difficult choice:  Applying the Florida Statutes then in effect, or applying a Property Insurance Policy Provision:  First Protective Insurance Co. v. Schneider Family Partnership, 2012 WL 5499987 (Fla. 2d DCA November 17, 2012)(STATED NOT FINAL).  Actually, there was no choice at all under the facts of that case.

    The Florida Statutes then extant set out the requirements regarding Appraisal, or not, following a Mediation of Property Insurance Claims.  The Statutes then provided that in a situation where the Insurance Company requested Mediation, and the Mediation is unsuccessful, only an Insured, not the Insurance Company, can elect an Appraisal as the next step before litigation.  The current Florida Statute is Fla. Stat. § 627.7015(7)(2012), and it retains that requirement.

    The Florida Appellate Court, however, ruled in this case that the Property Insurance Policy Provision trumped the Florida Statute on the record facts.  "Because the statute does not address a situation where the insured requests mediation and the parties cannot reach an agreement, we conclude that under the statute FPIC is entitled to pursue an appraisal pursuant to the terms of the contract."   First Protective Insurance Co. v. Schneider Family Partnership, 2012 WL 5499987 *1 (Fla. 2d DCA November 17, 2012).  [Emphasis added.]

HAVE A GOOD THANKSGIVING, REMEMBER THE HUNGRY!

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NEW FLORIDA MEDIATION RULE: WHO MUST ATTEND, "CERTIFICATION OF AUTHORITY".

AND ATTENDANCE.  "WE MEAN IT NOW! Unless you agree otherwise."

      Florida Rule of Civil Procedure 1.720 has been changed effective this year.  This is the Rule that regulates Mediation requirements at Court-Ordered Mediations in Florida, things such as requiring the parties' attending representatives to have full settlement authority.  The Rule has also in the past required physical attendance at the ordinary Mediation, but newly effective amendments to the Rule seem on their face to tighten these requirements.

    At first, new Rule 1.720(c) reveals that the Florida Bar Civil Rules Committee has been hijacked by what might best be called "2012 speech."  The new Rule fleshes out the previous requirement that participating party representatives have full settlement authority, by adding a requirement that the representatives be the parties' "final decision makers".  (At least the Committee did not write that the parties had to send their "Deciders".)

    Specifically, Rule 1.720(c) (Download Florida Rules of Civil Procedure 2012 and see page 81 of the attached pdf) now provides:

  (c) Party Representative Having Full Authority to Settle. A "party representative having full authority to settle" shall mean the final decision maker with respect to all issues presented by the case who has the legal capacity to execute a binding settlement agreement on behalf of the party. Nothing herein shall be deemed to require any party or party representative who appears at a mediation conference in compliance with this rule to enter into a settlement agreement.

 That last quoted sentence is also new.  It clearly means that although the defined "final decision makers" have to attend Mediation, they do not have to settle there, so long as they attend.

     The final decision makers now also need to be identified by pleadings filed by the parties' lawyers.  The language of the new Rule provides that lawyers must file (not simply serve) a "certification of authority."  This new pleading shall be a certification, the Rule now provides, that the attending final decision maker has the legal capacity to enter into a settlement agreement at the Mediation which would bind the party in question.

     These new additions are found in Rule 1.720(e) (Download Florida Rules of Civil Procedure 2012 and see again p. 81 of this pdf from the Florida Bar website):

 (e) Certification of Authority. Unless otherwise stipulated by the parties, each party, 10 days prior to appearing at a mediation conference, shall file with the court and serve all parties a written notice identifying the person or persons who will be attending the mediation conference as a party representative or as an insurance carrier representative, and confirming that those persons have the authority required by subdivision (b).

      As is the current practice concerning attendance at Mediations in Florida, the parties' lawyers can agree or the Court can enter an Order that physical attendance is not required in a given case.  Fla. R. Civ. P. 1.720(a).

 There is an old saying that may be approporiate here:  "Everything is changing, but nothing is new."

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UPDATE MEDIATOR INFORMATION: Residential Mortgage Foreclosure Mediations: Wealthy Strategic Defaults.

   This post provides newly received information in an Update of the post here on Mediation of Residential Mortgage Foreclosures and the information available on the role of strategic defaults, on Wednesday, July 7, 2010.

"The rich are different; they are more ruthless."

Sam Khater, Senior Economist at Core Logic, quoted by David Streitfeld, "Biggest Defaulters on Mortgages Are The Rich" p. A1, col. 3 (New York Times Nat'l ed., Friday, July 9, 2010).

   Any concern with so-called "strategic defaults" needs to take this statistic into account to be realistic:

   Homeowners with Million Dollar Mortgages, of which there are apparently quite a few, plan and act out their strategic defaults at a rate of about 2-to-1 compared to people who owe lesser amounts of money on their mortgaged homes.

   It appears that these "wealthier" Homeowners are not deterred by accusations of moral depravity or by threats that the Lender will pursue them for the amount they owe beyond the value of the house the Homeowners leave behind in their strategic defaults.  See David Streitfeld, "Biggest Defaulters on Mortgages Are The Rich" p. A1, col. 3 (New York Times Nat'l ed., Friday, July 9, 2010).

   These are things which Mediators need to be aware of, before attempting to conduct successful Mediations of Residential Mortgage Foreclosures in such cases.

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Mediation of Florida Residential Mortgage Foreclosures Taking Effect.

   Mediation of Florida Residential Mortgage Foreclosures is taking effect.  In some Florida Counties, such as Pinellas and Pasco, mandatory Mediation is already in effect for Homesteads, i.e., where the Homeowner lives in the home.  See Editorial, "New Foreclosure Mediation Program is Win-Win For Homeowners, Taxpayers" (St. Petersburg Times Online, Friday, July 2, 2010).

   As Lenders increasingly take possession of more and more Foreclosed Properties which simply cannot be sold, nor sold at anything like the vanished balance of the Foreclosed Mortgage, the price seems to be rising for so-called "strategic defaults," or defaults planned by the Borrower who owes more on the Mortgage than the Property is worth.  Mediators in Residential Mortgage Foreclosure cases in any State or other jurisdiction will want to have available perhaps a list of resources for uninformed Borrowers who may think that they do not face any downside risk other than impairing their Credit.  The price now includes not only impaired Credit, but "[t]he lender could sue you for the balances you owe....  You may want to talk to an attorney familiar with debtor protection in you state (a bankruptcy attorney might be a good choice) to get an assessment of your risk."  Liz Pulliam Weston, "What Landlords Risk by Abandoning Mortgages" (latimes.com, Sunday, July 4, 2010).  See also Adam Geller, Associated Press copyrighted story, "Finding Gold in Them Thar Foreclosures" (Washington Post Online, Sunday, July 4, 2010).

   "Homeowners in volatile boom-and-bust states such as California and Florida have been especially prone to walk away from deeply negative equity situations."  Kenneth R. Harney, "Lenders' Focus Turns to Strategic Defaults" (latimes.com, Sunday, July 4, 2010).  This linked report mentions a couple of results of a study funded by the Federal Reserve Board that we already knew, but here they are:

1.  Strategic defaults have geographic implications, meaning that there apparently tend to be a greater number of strategic defaults in places like "California and Arizona, where state law limits lenders' ability to collect post-foreclosure deficiencies on principal residence mortgages," unlike other states "such as Florida and Nevada, where lenders face fewer restrictions."  Id.  It is not reported how this finding squares with the fact that Florida has one of the greatest numbers of strategic defaults, but there you are.

   The highly paid Fed researchers conclude from this that "'borrowers may factor into the costs of default the potential legal liabilities resulting from a foreclosure.'"  Id.  [Emphasis added.]  In other words, Borrowers contemplating not paying off a Mortgage balance that is far greater than a house is worth, may know that they live in a State that affords them certain protections if the Lenders come after them for more than the house.  Duh!

2.  "The Fed researchers [also] concluded that the depth of borrowers' negative equity positions is an important tripwire to their decision to send back the keys."  Id.  "The more people owe, the more they are likely to walk away," is not a revelation.  Let alone one to pay Taxpayer money for.

Mediators in Residential Mortgage Foreclosures will be sure to want to know these things for a good and productive Mediation.

P.S.

Residential Mortgage Foreclosure lawsuits have apparently had little or no effect on luxury vacation housing projects, however.  "Walt Disney Co. this morning [June 23, 2010] officially unveils its plans to begin building luxury vacation homes on its land near its Orlando theme parks."  Robert Trigaux, Venture Blog on St. Petersburg Times web site, post of June 23, 2010 entitled, "High Risk (Or Insanity) Lurking in Orlando's Luxury and Stratospheric Housing Markets?"

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Florida Property Insurance Claims Mediation Statute Means What it Says.

   Florida Statute Section 627.7015(7). entitled "Alternative Procedure for Resolution of Disputed Property Insurance Claims," requires notice by certain Property Insurance Companies to "a first-party claimant of its right to participate in the mediation program under this section".  The Statute mandates that failure to provide the statutorily required notice means that the Property Insurance Company, which includes certain Homeowners Insurance Companies, cannot require an Appraisal. 

   The Statute means what it says, according to the only Judge found in Florida to have construed the Statute to date.  "Thus, the statute states that if an insurer fails to give notice of the right to mediation, or the insurer requests the mediation and one of the parties rejects its outcome, the insurer loses its right to invoke the appraisal provision of the insurance contract."  QBE Insurance Corp. v. Dome Condominium Ass'n, Download QBE Insurance Corp. v. Dome Condominium Ass'n (S.D. Fla. Case No. 08.20906, Order on Pretrial Conference, Filed 09.17.10) also published as 2009 WL 3241284 (S.D. Fla. September 17, 2009)(Westlaw subscription required to access Westlaw).

  In the cited case, "the insured requested, and the parties participated in, DFS [Florida Department of Financial Services, which houses the Florida Office of Insurance Regulation] mediation ... and, after the mediation reached an impasse, the parties began the appraisal process ...."  QBE Insurance Corp. v. Dome Condominium Ass'n, 2009 WL 3241284 *2 n.6 (S.D. Fla. September 17, 2009).  Neither the parties' participation in statutory Mediation, nor the parties' participation in Appraisal, affected the outcome of the Federal Court's ruling in this case.  The simple, determinative fact was that QBE Insurance Company did not provide the statutorily required notice that mediation of this dispute was available to the first-party claimant, its Insured:  "QBE lost its right to invoke appraisal by failing to comply with the notice provision of the [sic] § 627.7015 and it cannot reinstate that right.  Nothing in the statutory language would allow for that."  Id. at *3.

   This decision has not yet been appealed, and there is a good reason why not.  No judgment has been entered yet, although there has been a verdict. 

   Pacer, the online docket of this case, reveals a Jury Verdict in favor of Dome in two separate awards which total $6,400,000.00 or $6.4 Million.  Download QBE Insurance Corp. v. Dome Condominium Ass'n (S.D. Fla. Case No. 08.20906 Jury Verdict 12.18.09, Filed 12.21.09).

   Judgment has not yet been entered because the parties dispute Interest.  The Federal Court entered a Stay Order on January 13, 2010 which is apparently still in effect.  Download QBE Insurance Corp. v. Dome Condominium Ass'n (S.D. Fla. Case No. 08.20906 Order of 01.13.10 Filed 01.14.10).  This Order stayed the entry of a Judgment until the Supreme Court of Florida answers questions certified to it by the Eleventh Circuit Court of Appeals on March 9, 2009 in Chalfonte Condominium Apt. Ass'n v. QBE Insurance Corp., 561 F.3d 1267 (11th Cir. 2009).

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More Knowledge Tools for Residential Mortgage Foreclosure Mediations.

   In a report released by the Federal Reserve Bank, a "home ownership gap" is explained and explored.  And a new term is coined.  Knowledge of this gap is important for Mediators and all parties and their Counsel in Residential Mortgage Foreclosure Mediations.

  The "home ownership gap" is explained as the gap that remains after subtracting the percentage of homeowners who owe more on their mortgages than their home is worth ("homeowners under water"), from the official percentage of home ownership in a given locale according to statistics released by the Federal Reserve Board.  The percentage of homeowners under water comes from the Case-Shiller Home Price Index.

   Some home ownership gap figures using this measure:

Tampa Bay:

   67.6% official Federal Reserve Board home ownership rate.

  -51.2% homeowners under water

 = 16.4% home ownership gap.

Miami:

   22.5% home ownership gap.

And then, there is the home ownership gap in Las Vegas, Nevada, after this mechanism is used:

   43.9%.

 

The FRB report also contains this description of homeowners under water: "renters in waiting".  If home ownership gaps are in such high percentages, can Residential Mortgage Foreclosures and Mortgage Insurance Claims be far behind?  They seem to be results that should be anticipated after looking at these measures.

The phenomena of "home ownership gaps" are explored in an informative and thought-provoking post on "Ventures Blog" published by the St. Petersburg Times Online on Friday, June 11, 2010,  written by Robert Trigaux.

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Florida Residential Mortgage Foreclosure Mediation is No "Whim".

This is an update to previous posts here regarding Residential Mortgage Foreclosure Mediations, most recently on April 15, 2010,  March 25, 2010 and  March 26, 2010.

   Results are disheartening from the Administration's attempts to arrange voluntarily modified mortgages, and so reduce the number of defaults and Foreclosures.  See David Streitfeld, ""Failures Up In Modified Mortgages" p. B1, col. 6 (New York Times Nat'l ed., "Business Day" Section, Thursday, April 15, 2010).

   "Principal" reduction is apparently not going to be a tool volunteered by mortgage servicers and investors.  They may not have either the authority or the stimulus to resolve mortgage defaults by anything less than Foreclosure.  In fact, one of their reporters has described principal reduction itself not as an option, but as a "whim":

   The notion of cutting principal, however, has already run into some resistance from the big banks, which do not want borrowers to get the idea that their mortgage can be chopped on a whim.

Streitfeld, April 15, 2010 New York Times, supra.

   If borrowers took the position, which they have not taken, that principal repayment is a "whim," that could be described as foolish, for one thing.  It would certainly be counterproductive to any resolution short of a Foreclosure contest, as well.

   Florida now requires Residential Mortgage Foreclosure Mediations in virtually all Residential Mortgage Foreclosure actions filed in the State.  If Mediation is to have any hope of success in resolving these mortgage disputes, and not merely delaying their resolution by costly Foreclosure contests, more than moonbeam "whims" will be required of the parties who sit at the negotiating table.

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Residential Mortgage Foreclosure Mediations May not Include Principal Reduction Option ...

...After All.  This is an update to previous posts here regarding Residential Mortgage Foreclosure Mediations, most recently on March 25, 2010 and  March 26, 2010.

   Not long ago, perhaps a matter of three weeks at the most, Bank representatives were quoted as speaking with the authority of their Banks, that the Banks are now willing to consider reducing the principal on residential mortgages that are in Foreclosure.

   Not so now, say two testifying representatives of the Banks, one from JP Morgan Chase and one from Wells Fargo.  They told the House Financial Services Committee, under oath, that their Banks will not consider reducing principal after all.  Their "investors" will not let them, for one thing.  It would not be good for the country, for another thing.  See David Streitfeld, "Banks Resist Plans to Cut Mortgages" p. B1, col. 6 (New York Times Nat'l ed., "Business Day" Section, Wednesday, April 14, 2010).

   Please.  If the Banks will not reduce the amount due on their mortgage loans once they have the borrowers' signatures, that is their choice.  But spare us the lectures about morality, something about which the Big Banks clearly know so little.

   In the interim, will Mortgage Insurance Policies be called upon to satisfy the Banks which hold unpaid and perhaps never-to-be-paid Mortgages?

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Federal Government to Propose Reformation of Residential Mortgage Foreclosure Modification.

   **Author's Note:  If you have reached this blog through a list that carries advertising, your computer may or may not be put at risk either through the list or through the advertising.  I do not accept or authorize any commercial advertising of any kind on any list or post.  Placing commercial advertisements with or near any of my web log posts is prohibited.  Further, I do not recommend any products or services advertised with or near any of my posts or any list of my posts.** 

   The Obama Administration, in orders to the Treasury Department, is poised to propose reforming Residential Mortgage Foreclosure Modification on the day of this post.  Further developments will be posted here after they happen.

   In a press conference scheduled for later on this morning of Friday, March 26, 2010, unnamed individuals employed in the "Obama administration" reportedly will announce three (3) legislative or regulatory proposals:

1.  "Encourage" Lenders to reduce principal on certain Residential Mortgages.

2.  Authorize the Federal Housing Administration to refinance "loans from borrowers whose home's [sic] value has sunk below what they owe on it," i.e., to refinance loans previously secured by borrowers with mortgages on houses in which they are "underwater" or owe more than the house is worth.  This proposal would be extended even to homeowners who have not fallen behind in their mortgage payments.

3.  Require Lenders to "offer" unemployed Borrowers reductions in their payments "for a minimum of three months."

See David Streitfeld, "A Big Expansion is Planned in Aid to Homeowners/Fighting Foreclosures" p. A1, col. 6 (New York Times Nat'l ed., Friday, March 26, 2010).

   So far these proposals seem to be talk.  It is not clear whether they depend on legislative enactment, regulation overhaul, or both.  Until approved and enacted, these proposals are moonbeams in the hand, there is really nothing there at all:  Except hope. 

   When these changes are made, I will post them here.

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Major Tool for the Residential Mortgage Foreclosure Mediation.

  **Author's Note:  If you have reached this blog through a list that carries advertising, your computer may or may not be put at risk either through the list or through the advertising.  I do not accept or authorize any commercial advertising of any kind on any list or post.  Placing commercial advertisements with or near any of my web log posts is prohibited.  Further, I do not recommend any products or services advertised with or near any of my posts or any list of my posts.** 

   Bank of America recently announced that for some Adjustable Rate Mortgages ("ARMs") it will actually entertain reducing the principal.  The outlines of this new plan are reported by, e.g., E. Scott Reckard, "Bank of America to Reduce Mortgage Principal for Some Borrowers/The $3-Billion Program Involves Certain Adjustable-Rate Loans Issued by Countrywide Financial, the Loss-Plagued Lender that BofA Acquired in 2008" (Los Angeles Times Online, Thursday, March 25, 2010).

   This position by a major Lender provides a huge tool for the Residential Mortgage Foreclosure Mediation.

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Residential Mortgage Foreclosure Mediation and New HAFAP Short Sale Rules.

    **Author's Note:  If you have reached this blog through a list that carries advertising, your computer may or may not be put at risk either through the list or through the advertising.  I do not accept or authorize any commercial advertising of any kind on any list or post.  Placing commercial advertisements with or near any of my web log posts is prohibited.  Further, I do not recommend any products or services advertised with or near any of my posts or any list of my posts.** 

   New Rules issued by the Treasury Department are scheduled to take effect April 5, 2010 "designed to expedite short sales," one of the options under the Federal Government's wide variety of potential Mortgage Modification Programs.  A short sale is when the homeowner sells the mortgaged property for less than what is owed on the mortgage, but at the property's CMV or current market value.  The new Rules reportedly insert incentive payments for Mortgage Servicers, and for holders of second liens including home equity Lenders, into the Home Affordable Foreclosure Alternatives Program.  Tracey L. Longo, "Treasury Hopes New Rules Send Short Sales to the Rescue of Underwater Mortgages" (Washington Post Online, Saturday, March 13, 2010).

   Here is a link to a summary of the new Rules offered by the Washington Post Online.

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Residential Mortgage Foreclosure Mediation: HAMP Hampers Modifications, Mediation.

  **Author's Note:  If you have reached this blog through a list that carries advertising, your computer may or may not be put at risk either through the list or through the advertising.  I do not accept or authorize any commercial advertising of any kind on any list or post.  Placing commercial advertisements with or near any of my web log posts is prohibited.  Further, I do not recommend any products or services advertised with or near any of my posts or any list of my posts.** 

   The author attended a day-long Residential Mortgage Foreclosure Mediation Training Seminar at the Hillsborough County Bar Association in Tampa, Florida this past week.  The most important aspect of Mortgage Modification options that was featured in the Training, is the Federal HAMP or Home Affordable Mortgage  Program.  Parenthetically, HAMP calculations include the costs associated with Mortgage Insurance.

   HAMP requires a "three-month threshold," which is a condition of repayment of HAMP's temporary modification terms, before borrowers will be considered for permanent mortgage modification under HAMP.  According to Treasury Department figures reported on Friday, March 13, 2010, some 500,000 -- half a million -- "borrowers" reportedly have passed HAMP's three-month threshold but have not received permanent modifications at this time.  Renae Merle, "Borrowers in Foreclosure Prevention Plan Losing Mortgage Aid" (Washington Post Online, Saturday, March 13, 2010).

   The Treasury Department also reported this past week that 168,000 "households" have received dispensation from HAMP for permanent mortgage modification.  David Streitfeld, "Loan Modification Program Starts to Get Some Traction" p. B2, col. 5 (New York Times Nat'l ed., "Business Day" Section, Saturday, March 13, 2010).     There are an additional 90,000 "borrowers" in the pipeline that leads from temporary to permanent mortgage modifications.  Renae Merle, "Borrowers in Foreclosure Prevention Plan Losing Mortgage Aid" (Washington Post Online, Saturday, March 13, 2010).

   "About 90,000 distressed borrowers have lost their mortgage aid" under HAMP, "and many more are at risk of losing the help," according to the Treasury Department report.  Merle, Washington Post Online, supra.  Part of the difference in accounting for 90,000 borrowers in the pipeline versus another group of 90,000, apparently, who have already lost their mortgage aid versus a total of 500,000 who passed the three-month threshold required by HAMP, is that many borrowers reportedly are in danger of losing, but have not yet lost, their HAMP modification entirely.  Borrowers tend to blame this on delays by Lenders, and Lenders tend to blame Borrowers for not turning in paperwork (which Borrowers tend to note is routinely lost by Lenders even after Borrowers turn in the same documentation three or four or more times).   See Merle, Washington Post Online, supra.

   The Treasury Department estimates that there are 1,800,000  "potential modifications."  David Streitfeld, "Loan Modification Program Starts to Get Some Traction" p. B2, col. 5 (New York Times Nat'l ed., "Business Day" Section, Saturday, March 13, 2010).  Other sources quoted in the linked New York Times newspaper article highlight the discrepancy between homeowners with temporary mortgage modifications who are qualified for permanent modifications, compared to those who receive permanent modifications, a discrepancy which reportedly runs as high as 66% qualified and 25% made permanent.  Id.

   In the Training session I attended this past week it was made clear that much of Residential Mortgage Foreclosure Mediation is about the numbers.  These numbers tell a story about the state of HAMP that is already well known to Borrowers and to Lenders.  Clearly, these numbers should also be well known by Mediators.

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Principal Reductions: Another Tool for Residential Mortgage Foreclosure Mediations?

  **Author's Note:  If you have reached this blog through a list that carries advertising, your computer may or may not be put at risk either through the list or through the advertising.  I do not accept or authorize any commercial advertising of any kind on any list or post.  Placing commercial advertisements with or near any of my web log posts is prohibited.  Further, I do not recommend any products or services advertised with or near any of my posts or any list of my posts.** 

   The President of Ocwen Financial Services, based in West Palm Beach, Florida and a major player in the U.S. home loan market, "testified to Congress this week that more principal reductions are needed when troubled home loans are modified." Kimberly Miller, "Ocwen President to Congress:  Principal Reductions Save Mortgages" (South Florida Sun-Sentinel.com republished from the Palm Beach Post on Friday, March 5, 2010).

   Principal reductions may become another useful option to be explored during Residential Mortgage Foreclosure Mediations.

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Mediation With Full Authority in Good Faith, Including Mediating Insurance Issues.

 Author's Note: 

After writing this post, the author first became aware that at least one entrepeneur is aggregating these posts, along with others, and using them to sell advertising.  The author has never authorized anyone to sell advertising in connection with any posts on this Web Log.  There has never been a charge or fee of any kind for any post that I have ever written on any Web Log, including my own.

Advertising in connection with any posts I have authored in the past or will author in the future is not authorized.  It is prohibited. 

Further, the author does not recommend any services or products which have had their ads linked to any posts or to any list of posts anywhere on any web site now or ever.  Those products and services are unknown to me.  I have nothing whatsoever to do with any of them, and never have.

 

   On Insurance Claims Bad Faith Law Blog, I discuss my experience both as a Certified Mediator and as Counsel at Mediations under the Florida Rules of Civil Procedure, especially Rule 1.720(b).  (Rule 1.720(b) can be found on the link I have embedded, above, to the Florida Supreme Court's online publication of the Florida Rules of Civil Procedure, at the page numbered "CIV-79," which is page 111 of the linked pdf document.)

   In Florida, the parties to a Mediation have the option to stipulate that the Insurance Company representative need not physically attend or have the "full authority" described in the Rule, or in fact to "stipulate otherwise," i.e., to stipulate to anything other than what is provided in paragraphs (1), (2) or (3) of Rule 1.720(b).

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Residential Foreclosure Mediation: More on 'Modified Mortgage Loan Modifications' Proposed.

   This updates a post here on Wednesday, January 27, 2010.

   ""We're making it as easy as possible."  Assistant Treasury Secretary Herbert M. Allison, Jr., quoted by David Streitfeld, "Treasury Streamlines its Mortgage Program" p. B3, col. 6 (New York Times Nat'l ed., "Business Day" Section, Friday, January 29, 2010).

   The Federal Making Home Affordable Program, or Home Affordable Modification Program ("HAMP") is definitely the recipient of two changes made by the Treasury Department.  This option to Foreclosure will now require, first, that qualifying borrowers submit "two pay stubs and an electronic form allowing access to their tax returns," instead of their W-2's.  David Streitfeld, "Treasury Streamlines its Mortgage Program" p. B3, col. 6 (New York Times Nat'l ed., "Business Day" Section, Friday, January 29, 2010).  It remains to be seen, of course, whether this change will be as attractive to lenders seeking Foreclosure as to borrowers sued in Foreclosure.

   The other change made by Treasury to HAMP is to require applicants-borrowers to provide "financial documents" up front when they apply for HAMP in the first place.  As things stand now, HAMP applicants are for the most part enrolled in a trial modification program first, then after that are asked for more documentation.  Id.  

   These two Treasury changes to HAMP came at the same time as announcements by Freddie Mac and by Fannie Mae both, that delinquency rates had risen, again.  "The reports showed that the mortgage crisis was nowhere near ending."  Id.

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Residential Foreclosure Mediation: 'Modify Mortgage Loan Modifications' Proposed.

   The U.S. Treasury Department is apparently not pleased with the pace of its Making Home Affordable mortgage loan modifications or "Home Affordable Modification Program" ("HAMP").  It is reportedly prepared to ask no longer for tax documents to evidence residential homeowners' financial status.  Instead, Treasury will reportedly propose to ask for "pay stubs".  Peter S. Goodman, "Treasury Weighs Fixes to a Program to Fend Off Foreclosures" p. B1, col. 2 (New York Times Nat'l ed., "Business Day" Section, Friday, January 22, 2009).

   Deja vu all over again (as Yogi Berra never said).  One of the types of 'evidence' of financial worth that subprime lenders asked from applicants for Subprime Mortgages, was their "pay stubs" rather than their tax returns.

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Mediation Held Part of "The Process of Settling the Claim".

    In a recent case, the Florida Insurance Guaranty Association was held not to comply with the provisions of Florida Statute Section 627.7015 (2005), brought forward in all material respects as Fla. Stat. § 627.7015 (2009):  Download Florida Insurance Guaranty Ass'n v. Devon Neighborhood Ass'n (Fla. 4th DCA Opinion Filed December 2, 2009).  As a result, FIGA was held to the sanctions imposed which, in that case, included that "FIGA cannot now demand the completion of the appraisal process as a precondition to litigation."  Download Florida Insurance Guaranty Ass'n v. Devon Neighborhood Ass'n (Fla. 4th DCA Opinion Filed December 2, 2009), attached Official Slipsheet Opinion at 7.

   In its 2005 enactment which was at issue in the FIGA v. Devon Neighborhood Association case, and now, Section 627.7015 "establishes a mediation alternative for the handling of property insurance claims."  Download Florida Insurance Guaranty Ass'n v. Devon Neighborhood Ass'n (Fla. 4th DCA Opinion Filed December 2, 2009), at 2.  "Upon receiving a claim, the insurer must notify the claimant of its [the claimant's] right to mediation."  Download Florida Insurance Guaranty Ass'n v. Devon Neighborhood Ass'n (Fla. 4th DCA Opinion Filed December 2, 2009), at 3. 

   In 2005, the Florida Legislature amended Section 627.7015 to extend "the mediation alternative to 'commercial residential insurance policies.'  Included within the statutory definition for such policies is coverage provided by condominium associations for common elements.  See § 627.4025, Fla. Stat. (2005) [brought forward as Fla. Stat. § 627.4025 (2009)].  The policy in this case constituted a commercial residential policy."  Download Florida Insurance Guaranty Ass'n v. Devon Neighborhood Ass'n (Fla. 4th DCA Opinion Filed December 2, 2009), at 3.

   The Fourth District Court of Appeal distinguished case law relied on by FIGA as being "inapposite [because] they all deal with coverage of a loss."  What the Fourth District Court of Appeal ruled next is extremely significant to future interpretations of statutorily required Mediation of Insurance Claims as clearly not applying to Mediation of Insurance Coverage disputes instead:

Here, no coverage issue is involved.  Only the process of settling the claim is affected by the statute.

Download Florida Insurance Guaranty Ass'n v. Devon Neighborhood Ass'n (Fla. 4th DCA Opinion Filed December 2, 2009), at 7.  [Emphasis added.]

PLAN TO ATTEND A SEMINAR ON "INSURANCE IN THE LAWSUIT (INCLUDING MEDIATION)" featuring Dennis Wall, sponsored by the Insurance Law Committee of the Orange County Bar Association in Orlando, Florida on Thursday, February 4, 2010.

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Calling All Mediators: Help Lenders, Borrowers in Foreclosure Mediations, Avoid Evictions.

    A Task Force assembled by the Supreme Court of Florida recently recommended that all of Florida's Trial Courts adopt a policy to require Mediations in Foreclosure Cases.  This is part of an effort to avoid evicting people from their homes whenever eviction can be avoided by mutual agreement between the Lender-Plaintiff and the Borrower-Defendant in the Foreclosure Case.  Report of the Florida Supreme Court Task Force on Residential Mortgage Foreclosure Cases, August 17, 2009:  Download Filed_08-17-2009_Foreclosure_Final_Report.  Foreclosure Mediations may be ordered in Foreclosure Cases, but Mediator participation at greatly reduced rates is voluntary.

    This policy is already in effect in many if not all Florida Circuit Courts.  Mediators who are willing to volunteer their time and services in this effort in the Ninth Circuit in the Orlando, Florida area only have to link to the Orange County (Florida) Bar Association here to volunteer.

    Volunteer Mediators in the Seminole County, Florida area may send their resume, a copy of their Mediator Certificate, and a cover letter to:

Seminole County Circuit Court

Mediation Department

301 N. Park Avenue

Sanford, FL  32771

Re:  Seminole County Fixed Fee Foreclosure Mediation Panel.

     If there is a program of Foreclosure Mediation in your jurisdiction, and if you are a Certified Mediator, please consider volunteering your time and services, too.

    If there is no program yet in your jurisdiction, please consider starting one.  Then be among the first volunteer Mediators in the Mediation Foreclosure program in your Court.  Without you, it cannot be done nearly as well.

To rephrase an insight penned by Albert Camus:

This may be a world in which people are evicted from their homes.  We may not be able to do anything about that.  But we can lessen the number of people who are evicted from their homes.  If you do not help in this effort, who will?

An identical call to Mediators is posted on this same date on Insurance Claims and Bad Faith Law Blog at www.insuranceclaimsbadfaith.typepad.com.

Please Read The Disclaimer.