This article provides a summary of some of the key points of Broward County Court Administrative Order dated March 25, 2010, and the requirements set for both borrowers and plaintiffs to the foreclosures (often banks, lenders or investors, referred to in this article simply as “plaintiffs" or “plaintiff").
The Order provides that all foreclosure cases filed after March 25, 2010 against a homestead residence meeting certain federal requirements (“Cases") cannot go to a final hearing unless the Residential Mortgage Foreclosure Mediation Program (“RMFM") has been completed. The Order defines a homestead property as a residential property for which an official homestead real estate tax exemption was granted prior to when the action was filed.
A mediation is a conference which must be attended by the borrower and plaintiff, and where the foreclosure case can potentially be settled before trial or a final judgment hearing. The Court has established a detailed RMFM program which sets forth stringent requirements for the plaintiff before they can ask for judgment. If the plaintiff does not comply with the RMFM program, the Court has the option of imposing sanctions on the plaintiff, including fees, costs and possible dismissal of the foreclosure.
The Court has ordered that the RMFM program will be free of charge to the borrowers, and that the plaintiffs must pay for the mediations. The Order provides requirements which the borrowers must follow as well. If a borrower does not comply with these requirements the Court can decide the case without a mediation beforehand. If borrowers do not want to go to mediation, they may sign a written agreement with the plaintiffs.
Mediators appointed by the Court must be certified by the Florida Supreme Court. The Program Manager will post the list of RMFM mediators from which it will select on its website.
The Court has appointed the American Arbitration Association as the Program Manager for all Cases. The Program Manager is there to help explain the court and mediation process to the borrowers, receive necessary documents from both sides and make sure that the court proceedings comply with the Order. The Program Manager will begin reaching out to the borrower once the foreclosure is filed to explain the RMFM program.
The Program Manager may assist with enforcing the provisions of the Order and reporting noncompliance to the Court. The Program Manager must also report to a court administrator whether the foreclosure parties are satisfied with the RMFM program.
Filing Requirements for Cases
This Order covers Cases in which the origination of the loan was subject to the provisions of the Truth In Lending Act, Regulation Z (“TILA"). The requirements of TILA govern most residential loan transactions. The purpose of TILA is to disclose fees and costs associated with loans to consumers, and to cancel certain loan transactions involving a consumer's primary residence.
All Cases must include a Court form with the filing of the foreclosure complaint which states:
1) Whether the loan was subject to TILA;
2) Whether the subject property is a homestead residence;
3) Whether the borrower and plaintiff completed mediation and foreclosure counseling as approved by the Court before the foreclosure was filed; and
4) A list of plaintiff representatives including the name and contact information of the person:
a) who will represent the plaintiff at mediation; and
b) have full settlement authority to modify the loan and settle the foreclosure case.
Borrower’s Rights and Responsibilities
Before the RMFM mediation can be scheduled, the borrower must meet with an approved mortgage foreclosure counselor and complete a Court form, the “Borrower’s Financial Disclosure for Mediation." A mortgage foreclosure counselor means a person who is properly trained, who has no criminal history of felonies or dishonesty and who is properly certified by either the United States Department of Housing and Urban Development (“HUD") or the National Foreclosure Mitigation Counseling Program (“NFMC"). The Program Manager will refer the borrower to an appropriate counselor.
Also prior to the mediation, the borrower is entitled to receive from the plaintiff the following documents:
1) Evidence that the plaintiff is the true owner of the loan;
2) A complete loan payment history;
3) The plaintiff’s statement of the present net value of the loan; and
4) The property’s most current appraisal available to the plaintiff.
If the borrower does not wish to participate in mediation or does not comply with the RMFM requirements, the Program Manager will file the Court form notice of nonparticipation.
The Program Manager will advise the borrower that he or she is entitled to consult with an attorney prior to the mediation and to have an attorney present at the mediation. The borrower may apply for a volunteer pro bono attorney (meaning an attorney who will handle the case free of charge to the borrower). If an attorney accepts the case, he or she must file a notice of appearance.
Mediation must be scheduled between 60 and 120 days after the filing of the foreclosure. A borrower must have an opportunity to meet with a mortgage foreclosure counsel prior to the mediation. The plaintiff’s representative with full settlement authority and/or the plaintiff’s counsel, the borrower and any attorney for the borrower must be physically present at the mediation. The plaintiff’s representative may not appear by phone or other remote method unless the plaintiff files an approved Court notice at least five days before the mediation. If the plaintiff’s representative attends remotely, a person authorized by the plaintiff to sign a settlement agreement must appear in person. The plaintiff’s representative must still remain on the line for the entire mediation.
The Program Manager will take attendance of all parties required to attend the mediation. If anyone is not present, the Program Manager will record a non-appearance of that party. Additionally, if the plaintiff’s representative does not have full settlement authority, meaning that the representative has authority to settle without further consultation and resolve the foreclosure suit, the Program Manager will enter a non-appearance for that representative.
If the plaintiff’s representative appears via communication equipment and the mediation results in an impasse (meaning no settlement or agreement was reached between the parties) the plaintiff must file a Court form certifying whether the plaintiff’s representative attended mediation. If the plaintiff’s representative fails to file the form within five days after the impassed mediation, the Court may impose sanctions against the plaintiff, including but not limited to costs, personal appearance at a second mediation or dismissal of the foreclosure. If the borrowers or their counsel fail to appear at the mediation, they may also be sanctioned by the Court, and be responsible for attorney’s fees and costs.
RMFM Timeline and Forms
A complete timeline by which RMFM events must be completed in Cases is provided on page 15 of the Order. An Index of Exhibits is contained on page 18, listing additional guidelines and the Court-approved forms which must be used according to RMFM.
Read the complete Order here.
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