Here in Florida, the huge increase in homeowners not being able to pay their mortgages has been a crisis that's been with us for awhile.  In fact, it's been almost a year now since the Florida Supreme Court considered the August 2009 recommendations of its Residential Foreclosure Task Force -- the task force it created to deal with the overwhelming impact to Florida courtroom dockets that resulted from the rapid rise in foreclosure proceedings.

On December 28, 2009, the Florida Supreme Court issued an administrative order signed by Florida Supreme Court Chief Justice Peggy Quince (read the Order here) that advanced the use of alternative party resolution (mediation) of all cases involving residential homesteads (primary homes) in the hopes that the banks and their mortgage holders could iron out agreements outside of the courtroom (thus allievating the stress being placed upon Florida's 20 judicial circuit courts presiding over foreclosures across the state). 

In sum, all residential homestead foreclosures would be referred by Florida's judges to mediation unless the parties had already negotiated and finalized some type of agreement. 

Mandatory mediation: the answer to the problem.

Under this new plan, a four month program was put it place:  within a 120 day mandatory timetable, residential homeowners at risk of losing their homesteads to foreclosure were required to get financial counseling and thereafter to work with their lender and their assigned mediator.  Another mandatory participant:  a lawyer from the law firm representing the bank, i.e., the firm that was responsible for preparing and filing the foreclosure documents on behalf of the lender. 

Which brings us now to the latest crisis:  the mediation plan is failing because the Law Firm of David J. Stern would be involved in so many of these required mortage mediations, and the Stern Law Firm is no longer representing many of the state's lenders, having withdrawn from their foreclosure matters en masse. 

Regardless of that Florida Supreme Court 120 day ticker, the lenders cannot mediate with the mortgage holders because they don't have new legal representation in place, to sit in the stead of the David J. Stern Law Firm.  And Stern represented lots of big banks across the state in hundreds of foreclosure proceedings, so this impacts a huge number of Florida homesteads.

Which means someone should be worried about violating a Court Order, right? 

Technically, any mediation that fails to conclude with the mandatory time frame is in violation of the Florida Supreme Court Order.  However, the reality is that home owners probably are not going to move any circuit court to push a mediation date since the delay means that they can stay in their homes longer.  The lenders, of course, aren't going to file a motion against their own best interests.  One wonders how this matter gets before a judge for any judicial ruling to be made.  Stymied!

So, another facet of Foreclosuregate appears:  a bottleneck of foreclosure cases remains a problem despite the solution implemented by the Florida Supreme Court.