Florida Court Orders Mediation with Lenders

[dealingwithHomeEq]

Foreclosure mediation gets OK Orlando Sentinel (Florida) February 26, 2009 Thursday



Copyright 2009 Sentinel Communications Co.
Orlando Sentinel (Florida)

February 26, 2009 Thursday
FINAL

SECTION: LOCAL NEWS; FLORIDA; Pg. C2

LENGTH: 342 words

HEADLINE: Foreclosure mediation gets OK

BYLINE: Rene Stutzman, Sentinel Staff Writer

BODY:


Orange County residents being sued for foreclosure have gotten help.

Chief Circuit Judge Belvin Perry Jr. Wednesday signed an order giving them the right to demand mediation.

The order means that instead of running into a roadblock when they call their mortgage companies, hoping to work out a solution, they'll be able to sit down with someone and negotiate.

The number of foreclosures in Orange County has increased more than six-fold since 2004, according to numbers from the clerk of courts. Last year, foreclosures totaled more than 26,000, a record. This year, they're on track to beat that.

"The volume is enormous," said Circuit Judge Frederick Lauten, head of the civil division of Orange Circuit Court which handles foreclosures.

Wednesday's order should help some property owners save their homes. It also should help lenders by breathing new life into some nonperforming loans.

"We came up with this because we want the lender and borrower to sit down and see if they can't work something out," Lauten said. "We've heard enough anecdotal evidence that 'I've called the bank, and I can't get anybody to talk to me.' We thought it was time . . . ."

Perry's order does not require mediation, but it lets borrowers know that if they demand it, they'll get it. It also allows judges to order it.

The order applies only to owner-occupied homes in Orange County.

A group of Orlando-area lawyers, working through the Orange County Bar Association, also has offered help.

David W. Henry, with the firm Allen, Dyer, Doppelt, Milbrath & Gilchrist PA, has organized a group of mediators willing to take on these cases for a fee that would pay them about one-third of what they normally charge.

"I was trying to find a way to give back and help," Henry said.

Last summer, Seminole County's chief judge, Clayton Simmons, issued a similar mediation order, saying distressed homeowners needed to be able to negotiate with their lenders -- not be put off until a hearing or auction.



CONTACT: Rene Stutzman can be reached at rstutzman@orlandosentinel.com or 407-650-6394.

GRAPHIC:
BOX:
Foreclosures in Orange County
2004 ...4,217
2005 ... 3,973
2006 ... 5,067
2007 ... 11,351
2008 ... 26,131
Jan. 2009 ... 2,392
SOURCE: Orange County Clerk of Courts

LOAD-DATE: February 26, 2009



Judge: Mediation not needed in Osceola home foreclosures Orlando Sentinel (Florida) March 14, 2009 Saturday



Copyright 2009 Sentinel Communications Co.
Orlando Sentinel (Florida)

March 14, 2009 Saturday
FINAL

SECTION: LOCAL NEWS; FLORIDA; Pg. B3

LENGTH: 527 words

HEADLINE: Judge: Mediation not needed in Osceola home foreclosures

BYLINE: Jeanette Rivera-lyles, Sentinel Staff Writer

BODY:


Homeowners facing foreclosure in Osceola County may be shut out of a process that could have provided some relief to them, because the judge who oversees their cases opposes it.

Mediation -- which helps homeowners restructure their loans -- is being required in Orange County and is encouraged in several others.

But in Osceola, where the foreclosure rate is the highest in Central Florida, an administrative judge says the mediation process ordered by his boss will just prolong foreclosures unnecessarily.

Late last month, 9th Judicial Circuit Chief Judge Belvin Perry, who oversees state courts in Osceola and Orange counties, issued an administrative order that makes mediation mandatory in foreclosure cases.

Perry's order says in many cases, homeowners and banks do not discuss a resolution until they get to court. That failure to communicate wastes time and resources, the judge says, "which could be obviated in part by mediation."

But the order doesn't apply to Osceola, where almost one of every 10 homes is going back to the lender, because administrative Judge R. James Stroker, who oversees Osceola, made the case against it. He wrote a letter to Perry objecting to mandatory mediation but refused to turn the letter over to the Sentinel. A court spokeswoman said the letter was exempted by public-records laws.

In an interview with the Sentinel, Stroker said that mediation would inevitably prolong the foreclosure process, overwhelm his court unnecessarily and benefit "a minimum number" of people.

"Downtown Orlando has eight or nine judges handling foreclosure cases," Stroker said. "Osceola has only one: me. If the administrative order were to apply here, it would create a backlog of six months."

Stroker said that as of Wednesday, he had 10,467 foreclosure cases pending but that he is moving "efficiently" toward closing them. He cited a recent spike in home sales in Kissimmee as evidence that the system is working.

"That's in part because foreclosures here are being processed efficiently [by putting the houses back on the market] and the people coming are able to pay and maintain them," Stroker said.

The majority of foreclosed homes in Osceola County are in Buenaventura Lakes and Poinciana. Stroker's opinion that mediation would benefit just a few is at odds with many of his peers. Judges in Seminole, Duval, St. Johns and other Florida counties have adopted measures to encouraged mediation.

Last month, lawyers headed by former Miami-Dade U.S. Attorney Kendall Coffey filed a petition with the Florida Supreme Court asking it to invoke its emergency rule-making power and require mediation in foreclosure cases.

In the petition, Coffey says that one of the "most frustrating realities" for people facing foreclosure is the inability to speak to a decision-maker for the lender who can explore potential solutions.

State Rep. Darren Soto, D-Orlando, wants to take mediation a step further. With a bill recently filed, Soto would set the ground rules for mediation, for example, requiring the renegotiation of the house to its current market value.

[AZ Meltdown]

Sorry but I think it is a VERY bad idea (and unconstituional) or the courts to order mediation.

The private contract is between the lender and borrower and subject to federal and state laws.
By judges demanding mediation they are retroactively adding legal requirements that are not found in the documents or the law.

What is next? A judge ordering you to mediation because someone else wants your home?

The wheels have come off the cart, and we are headed into anarchy if this stands.

And yes my home was foreclosed upon.

[dealingwithHomeEq]

Arizona courts have gone well beyond mere mediation--they utilize a compulosory arbitration scheme for claims less than $50,000.

Arizona Superior Court in Pima County - Civil Arbitration

[snapple candy]

Az, I understand your position about the courts ordering mediation but many of us cant even get our lenders to call us back and even sit at the table to negotiate anything. Someone needs to hold these lenders feet to fire to come to the table.

[AZ Meltdown]

Az, I understand your position about the courts ordering mediation but many of us cant even get our lenders to call us back and even sit at the table to negotiate anything. Someone needs to hold these lenders feet to fire to come to the table.

I disagree.
The goverment needs to stay out of the free market. It didn't and that is why we now have the massive mess that we do.

It shouldn't be bailing out insolvent banks, hedge funds and investment banks.
Those should be in bankruptcy!

If the govt was resolute right in the begining stating that the taxpayers will not be bailing out anyone, the lenders would go bankrupt (which is what happens when you make bad financial decisions), or start seriously writing down the loans so they don't go bankrupt.
Backrupt lenders toxic assets will sell if they are priced right,which is pennies on the dollar.
The new holders of that debt would be happy to reduce the principle to existing borrowers.

I bought my house for 375k 3 years ago, I owed 350K, the lender just put it on the market for 189K.
So what are these toxic assets really worth to someone willing to buy them up in bundles??
Probably 15% to 25% of the debt.
So mine would sell for 87K or less.
Instead it will be stuck on the taxpayer at full 350K value.

The lenders are counting on dumping their toxic debt on the taxpayers.
That is why the don't negociate.

Geitners buying up toxic debt scheme released today is exactly that.

Private contracts can not and should not be altered without the consent of both parties.
How would you feel if the courts ordered borrowers to renegociate their loans with the lenders because home prices had shot up?

[Irish Gal]

I disagree.
The goverment needs to stay out of the free market. It didn't and that is why we now have the massive mess that we do.

It shouldn't be bailing out insolvent banks, hedge funds and investment banks.
Those should be in bankruptcy!

If the govt was resolute right in the begining stating that the taxpayers will not be bailing out anyone, the lenders would go bankrupt (which is what happens when you make bad financial decisions), or start seriously writing down the loans so they don't go bankrupt.
Backrupt lenders toxic assets will sell if they are priced right,which is pennies on the dollar.
The new holders of that debt would be happy to reduce the principle to existing borrowers.

I bought my house for 375k 3 years ago, I owed 350K, the lender just put it on the market for 189K.
So what are these toxic assets really worth to someone willing to buy them up in bundles??
Probably 15% to 25% of the debt.
So mine would sell for 87K or less.
Instead it will be stuck on the taxpayer at full 350K value.

The lenders are counting on dumping their toxic debt on the taxpayers.
That is why the don't negociate.

Geitners buying up toxic debt scheme released today is exactly that.

Private contracts can not and should not be altered without the consent of both parties.
How would you feel if the courts ordered borrowers to renegociate their loans with the lenders because home prices had shot up?

I see both sides. Wall St./Bankers bought $5 billion worth of lobbying influence to both parties for the "gov't to stay out of the free market" which is why we are where we are at today. Free markets gone wild w/out any regulation whatsover doesn't work. This is what we get. And I don't buy the tired, old arguments that anything less than the kind of free market system we've been subjected to the past 30 yrs is socialism, blah blah blah. On the other hand, now that we are here, after 30 yrs of free markets gone wild, with no consumer protections in place whatsoever, and the econ is on its knees ready to split its head on the sidewalk and gush its blood all over us, I am not for bailing out the banks or insurance co.'s. I agree with most of Az's points listed, although disagree w/ the "free market" at all costs ideology. Get rid of Geithner, Summers, Bernake and everyone else involved in trying to save the bankers instead of the econ and taxpayers. Let the big banks fail. Say bye bye to AIG and all the "talented" people in the financial services industry who feel quite entitled in taking undeserved bonuses on the backs of hard working, taxpayers. Get rid of them all. I am so tired of the entitled takers in this country on the backs of the givers who've been taken hostage and have no voice.

[Irish Gal]

Florida homeowners who want to mediate or stay hopefully don't have
"Chinese drywall" in their homes

March 21, 2009

CHINESE-MADE DRYWALL RUINING HOMES, OWNERS SAY

(CNN) -- Officials are looking into claims that Chinese-made drywall installed in some Florida homes is emitting smelly, corrosive gases and ruining household systems such as air conditioners, the Consumer Product Safety Commission says.

The Florida Health Department, which is investigating whether the drywall poses any health risks, said it has received more than 140 homeowner complaints. And class-action lawsuits allege defective drywall has caused problems in at least three states -- Florida, Louisiana and Alabama -- while some attorneys involved claim such drywall may have been used in tens of thousands of U.S. homes.

Homeowners' lawsuits contend the drywall has caused them to suffer health problems such as headaches and sore throats and face huge repair expenses.

The drywall is alleged to have high levels of sulfur and, according to homeowners' complaints, the sulfur-based gases smell of rotten eggs and corrode piping and wiring, causing electronics and appliances to fail.
"It's economically devastating, and it's emotionally devastating," said Florida attorney Ervin A. Gonzalez, who filed one of the lawsuits. It would cost a third of an affected home's value to fix the dwelling, Gonzalez said.
"The interior has to be gutted, the homeowners have to continue paying mortgages, and they have to pay for a [temporary] place to live," Gonzalez said.

The CPSC has been investigating claims in Florida for more than a month, according to commission spokesman Joe Martyak. He would not confirm whether CPSC is checking other states or reveal how many cases it is probing.

The Florida complaints generally involve homes built or renovated in 2005 and 2006, when a building boom and post-hurricane reconstruction caused a U.S. drywall shortage that spurred builders to turn to imports, Martyak said.

The allegations come after a number of recent safety problems with other Chinese exports, ranging from toys to pet food.

**** and Nancy Nelson, who say the Florida retirement home they bought new in 2006 has Chinese-manufactured drywall, contend all their appliances with copper are failing, according to CNN affiliate WFTS-TV.
"The washing machine, the dryer, the microwave, a refrigerator -- these are all brand-new appliances, and they're breaking down," Nancy Nelson of Palmetto told the Tampa station. The Nelsons are among those who have complained to the state health department.

In a neighborhood in Homestead, Florida, owners of homes with Chinese-manufactured drywall say the dwellings smell like rotten eggs, especially on humid days, according to CNN affiliate WPLG-TV.

Electronics and appliances with copper components stopped working in short order, and copper pipes and wiring turned black, homeowners told the Miami station.

"My dream has turned into a nightmare," one of the homeowners, Felix Martinez, told WPLG-TV. He said he closed on the home in August 2006.
Michael Foreman, head of construction consulting firm Foreman & Associates in Sarasota, Florida, said he's been investigating drywall complaints in that state since last year and is sharing information with at least one group of lawyers preparing lawsuits on the matter. Based on shipping records, Foreman estimates the United States in 2006 and the first two months of 2007 imported enough drywall from Chinese manufacturers named in lawsuits to produce at least 50,000 homes at a size of 2,000 square feet each.

Florida ports alone took in enough of that drywall during those 14 months to build 30,000 homes of that size, he estimated, citing records he obtained from the Port Import Export Reporting Service, a company that collects information on cargoes entering and leaving U.S. ports. Foreman said he has yet to see import records from 2004 and 2005, years covering what he said was a building boom with a high demand for drywall.

Two Florida attorneys involved in separate class-action lawsuits, Gonzalez and Jordan Chaikin, said they, too, believe shipping records indicate tens of thousands of residences in the United States, with a good chunk of them in Florida, may have drywall from the manufacturers.

"The breadth of this thing is a lot bigger than people think," said Chaikin of the Parker Waichman Alonso law firm in Bonita Springs. Chaikin said the problem is perhaps more easily recognizable in Florida because humidity exacerbates it.

An Alabama-based homebuilder alleges that Chinese-manufactured drywall in 40 houses it built in 2005 and 2006 -- 32 in Alabama and eight in Florida -- caused corrosion or odor problems. The builder, Mitchell Co., has filed a class-action lawsuit in Florida against certain manufacturers, attorney Steve Nicholas said.

"We filed on behalf of builders because we believe ... they're going to be the ones with the initial loss" to fix the problems, said Nicholas, of Alabama law firm Cunningham Bounds.

In Miami, Gonzalez filed his class-action lawsuit for homeowners this month. The suit names as defendants three China-based drywall manufacturers that the plaintiffs say are affiliates of Germany-based manufacturer Knauf Gips KG. Knauf Gips KG was also named, along with three Florida developers and two distributors. The Miami suit seeks compensation and medical monitoring of the homeowners.

Joerg Schanow, a member of Knauf Gips' board, said in a telephone interview with CNN that the Chinese manufacturers named in the suit are part of Knauf Group, but not controlled by Knauf Gips KG.
"We here in Germany do not manufacture Chinese drywall. [Knauf Gips KG has] never asked companies to manufacture Chinese drywall for us or on our behalf. And there is no relationship at all," Schanow said. "I'm confident we will rebut this."

On its Web site, the company says the Knauf Group operates 150 factories worldwide, including the three Chinese production facilities named in the lawsuit.

One of the Chinese manufacturers named in the suit, Knauf Plasterboard Tianjin (KPT), said in a statement released through U.S. representatives that tests by an expert toxicologist it retained found "no associated health risks with the KPT product." KPT is still investigating whether its product has caused any corrosion, spokeswoman Yeleny Suarez said.
In a separate statement released through KPT's U.S. representatives, lawyers said there is no basis for the other two China-based manufacturers, Knauf Plasterboard Wuhu and Knauf Plasterboard Dongguan, to be part of the lawsuit and the manufacturers "will defend themselves vigorously."

At least two other class-action lawsuits -- one in Florida, the other in Louisiana -- name as defendants Knauf Gips, KPT and a Chinese drywall manufacturer not connected to Knauf, Taishan Gypsum Co. In a telephone interview with CNN, a Taishan Gypsum representative said "it's impossible that our products are found to emit poisonous gas in America," adding that the company didn't export to the United States. Martyak declined to say which Chinese manufacturers the CPSC is investigating.

And Foreman cautions that not all Chinese drywall manufacturers who exported to the U.S. are accused of supplying a defective product.
The Louisiana suit, filed by the Becnel Law Firm of Reserve, Louisiana, claims defective Chinese drywall was installed in a home in Pearl River.
The Louisiana Department of Health and Hospitals has received one complaint related to the drywall issue by phone, J.T. Lane, the department's deputy chief of staff, said Wednesday.

The department is in touch with the Centers for Disease Control and Prevention and the Florida Health Department, and is "trying to determine what might be the public health impact for Louisiana and what the most appropriate response to this is," Lane said.

[dealingwithHomeEq]

"It would cost a third of an affected home's value to fix the dwelling."

This could be a blessing in disguise to some people. The conversation with the lender could go something like this:

"Okay, Mr. Banker, I have a house that has toxic drywall and I'm currently a putative class member in a lawsuit over it. I think I may be having some health problems that are proximately related to the drywall too, so I'm talking to an attorney about filing my own separate suit for personal injury. You know that this house cannot be rented out or sold now unless you guys want to eat the cost of remediation after a foreclosure and spend six to eight months (and 1/3 of the already depressed value) to have the contractors rip this house to pieces. Who knows what else they'll find. I mean, if the original builder used toxic drywall, what other corners did they cut?"

"Considering the aforementioned facts, I'm willing to give you a third of what my normal payment is and if you should decide that this isn't enough, you--and anyone else that has anything to do with the subsequent dispositin of this house (realtors, brokers, landlords, appraisers)--had better be prepared to get the living $#!t sued out of you by the future buyer or renter unless you've either fully disclosed the defect or you've spent what it takes to remediate the problem. Your call."

[Enough Already]

I have to agree with AZ Meltdown. The more the government gets involved the worse it will be. They can't even manage themselves, let alone branch out into home mortgage and bank management. It's a nightmare. The whole foreclosure mess needs to be allowed to takes it course and burn itself out. Once that's done the rebuilding can begin.

Oh, and don't even get me started on the toxic drywall....YIKES!!