Mediation Counseling
Mortgage Mediation Counseling in Florida
The Florida Supreme Court issued an Administrative Order on December 28, 2009 mandating the establishment of a Residential Mortgage Foreclosure Mediation Counseling Program (RMFM) by each of Florida’s 20 Judicial Circuit Courts.
The RMFM Program allows homeowners and lenders to explore ways of resolving their foreclosure dispute quickly and without further litigation.
There is no cost to the homeowner for their participation in the Program. Click Here to read the Administrative Order.
Homeowners who participate in the Program first undergo mortgage foreclosure counseling and then proceed to the mediation process with the objective of reaching an early and mutually agreeable settlement.
Workout Options
Here are some of the possible Workout Options that are available to you through the mediation process. This listing is not intended to be all inclusive, and it should be understood that each lender may have a variety of additional programs and variations available depending on your individual circumstances.
Loan Modification: This is a permanent change in the terms of the loan that results in a lower monthly loan payment which the borrower is able to afford. Many lenders offer a “trial period” of 3-6 months of the payment to establish a new payment history, followed by a “permanent program” for the life of the loan.
Forbearance: A type of repayment plan that permits a period of time for suspended or reduced monthly payments, or regular payments before requiring additional amounts to repay the arrearage. Forbearance does not necessarily reduce the number of payments. The forbearance plan would be for a fixed period of time.
Repayment (Reinstatement): This gives the homeowner a fixed period of time to cure a default usually by paying the regular monthly payment plus an additional amount to bring the loan current.
Temporary Interest Rate Reduction: A designated period of time that the interest rate and monthly payment is reduced.
Blended Equity Mortgage: A homeowner with say a $ 200,000 mortgage at 6 % interest who cannot afford the payment of approx. $1,000 per month interest cost, would allow the lender to take a 25% ownership in the property and reduce the mortgage by the same amount.
Principal Reduction: The lender lowers the current mortgage balance in line with the current market value of the property, thus reducing the monthly payment.
Short Sale: Sale of the property to a third party in which the lender agrees to accept the proceeds of the sale as full satisfaction of the outstanding balance on the loan, even though the sale price is less than the loan balance. Homeowner must receive IRS form preventing lender from issuing a 1099 to homeowner as a tax hit.
Deed in lieu of Foreclosure: The homeowner voluntarily relinquishes the home to the lender after default to avoid foreclosure. Homeowner must receive IRS form preventing lender from issuing a 1099 to homeowner as a tax hit.
Cash for Keys: The client agrees to give up title to the property and move out in return for a nominal amount of cash from the lender. Homeowner must receive IRS form preventing lender from issuing a 1099 to homeowner as a tax hit.
Frequently Asked Mediation Questions
