Saturday, March 21, 2009

Forclosure Mediations Ordered

Pensacola's Kim Skievaski, chief judge of the three Northwest Florida circuit court systems covering Escambia, Santa Rosa, and Okaloosa counties, signed an administrative order last Tuesday, March 17, that diverts all newly filed foreclosure cases to mediation before proceeding in court. The Pensacola News Journal caught up with the news this morning.

The complete judicial order can be read or downloaded here [pdf warning].

As Kris Wernowsky summarizes it for the PNJ, "The order will affect mortgages of owner-occupied homes and those made through institutional, investment or commercial lenders. It does not extend to investment, vacation or commercial properties."

We commented over a year ago about the visibly escalating foreclosure filings in Escambia and Santa Rosa counties. So, it's no surprise that Chief Judge Skievaski's order recites that it is partly based on the fact that "residential mortgage foreclosure case filings have increased substantially in the First Judicial Circuit, and state and county budget constraints have limited the ability of the courts... to manage these cases in a timely manner... ."

What is a surprise -- and a very encouraging one, at that -- are the additional reasons Skievaki's order recites. Among them:
  • "high residential mortgage forclosure rates are damaging the economies of the counties in the First Judicial Circuit; and
  • "* * * high residential mortgage foreclosure rates place an increased strain on the citizens and families... who have lost jobs or who are otherwise suffering from the current downturn in the naiton's economy... ."
The order even quotes from a report of the Joint Economic Committee of Congress estimating
"that the total average cost of a foreclosure to the homeowner ($7,000), lender ($50,000), local government ($19,000), and neihboring home values ($75,000) is $151,000. By contrast... preventing the foreclosure would cost $3,300 per home, on average... ."
Those are not the kind of reasons you'd normally see recited in support of a system-wide administrative court order affecting thousands of cases. They are reality-based reasons which appeal to common sense and social justice.

Social justice! Hurrah for Judge Skievaski.

To be sure, mediation is basically a two-way street that can only encourage, not require, the parties to come to agreement. But one of the more nettlesome aspects of the derivatives nightmare created by Wall Street is that homeowners often can't make contact with their mortage holder to try to negotiate -- because no one knows who they are. Not even the lawyers representing the trust or other fictional entity that holds the derivatives package consisting of thousands and thousands of bits and pieces of mortgage contracts.

In some cases we've seen, all the homeowner has to do is ask the foreclosing party to show something proving they hold the right to foreclose. When the foreclosing party can't do it, the case is over.

Wall Street threw the nation down Alice's rabbit hole, and in the process turned the courts into pathetic midgets. Judge Skievaski has just eaten the cake that will restore them to life size.

minor edit 3/22am

1 comment:

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