Finally, the Beleaguered get some relief thanks to the Florida Supreme Court.

Florida's troubled homeowners and their lenders will increasingly meet at the bargaining table under a state supreme court order issued today that aims to reduce a foreclosure overload.

The order creates a statewide program that requires mediation on all homesteaded properties before a foreclosure hearing is held.

... homeowners will have an audience with their lender to discuss whether a loan modification or short sale is an option instead of foreclosure.

...Today's order makes lenders responsible for paying a maximum mediation fee of $750 per case, which would help pay for the mediator and cover administrative costs.

Judges hope the requirement will reduce the thousands of foreclosure cases clogging the system.

Palm Beach Post link

The insurance industry won the day with the "better something than nothing" legislation soon to be voted on, special interests opposed to proactive climate change ideas and cap and trade legislation will likely prevent meaningful results in the Senate, so there is little room for optimism that the financial special interest groups will be forced to give up its stranglehold on the American middle class.  

A few weeks ago, the Treasury Department, with much fanfare, announced a new modification of it's laughable mortgage modification program, HAMP  (Home Affordable Modification Program).  The grand plan was that

the government would try to use shame as a corrective, publicly naming those institutions that move too slowly to permanently lower mortgage payments.


Shaming Wall Street entities?  A fool's errand.  So much for the Administration getting a handle on things, although the Christmas Eve announcement of virtually unlimited assets available for Fannie Mae and Freddie Mac could be seen as a nice stocking stuffer for homeowners in trouble for mortgages backed by those government programs... as I posted as a comment in an earlier diary by Redstar today

the CW is that the boost in Fannie/Freddie funding leads directly to a planned "cramdown" of principal.

The government's decision to provide unlimited support to Fannie Mae and Freddie Mac probably presages more aggressive action to prop up the U.S. housing market.

The government may put a mortgage-modification effort, called the Home Affordable Modification Program, or HAMP, into overdrive in coming years, pushing for reductions in the principal outstanding on home loans overseen by Fannie (FNM 1.27, +0.22, +20.95%)  and Freddie (FRE 1.60, +0.34, +26.98%) , Bose George, an analyst at Keefe, Bruyette & Woods, wrote in a note to investors Monday.


Since Congress did drop the ball on cramdown opportunity earlier this month, let's hope the Admin can grab the reins... but not sure what program could then help the millions of households in crisis that don't have Fannie or Freddie backed paper. Even the Treasury Department realizes they don't have a big stick, as admitted last week when George Stephanopoulous interviewed Timmy Geithner, link

STEPHANOPOULOS:  Just right now.  And, you know, we're seeing some of the banks say, for Christmas, they're going to hold off on foreclosing, but do they need to be forced to do more?

GEITHNER:  You know, I think it's very important banks work very hard to start to rebuild trust and confidence of the American people in their institutions in the financial system.  They did a huge amount of damage to the country, lost a huge amount of trust and confidence.  They need to work very hard to restore that.  One of the ways to do that...

STEPHANOPOULOS:  Do you think they get that?

GEITHNER:  I don't think they get it.  I think some banks do; I don't think all banks get it yet.

STEPHANOPOULOS:  What do they need to do to show that they get it?

GEITHNER:  I think they need to make sure they're doing everything they can to help people who can afford to stay in their homes stay in their homes, help make sure they are lending in communities that need access to credit, they're working very hard to make sure that viable businesses that face some increased demand for orders now for their products now can get the credit they need.

They need to show some restraint and care in how they pay their people, and they need to be supportive of the kind of reforms we need to create a more stable system in the future.

STEPHANOPOULOS:  That's all encouragement.  Where's the stick?

GEITHNER:  The stick is through what Congress is going to have to legitimate through reforms.  You know, we're not going to run a strategy to protect the country from future financial crises that rests on the hope that banks in the future behave more wisely and more nobly.  We're going to run a strategy that requires reforms that are going to -- going to restrain risk-taking, provide better protections for consumers.

So now, at least for Floridians caught in the mess, there's another tool in their kit, forced mediation.  The Supreme Court recognizes it has a major problem...

"Right now, we have a court system that is going to break with the volume of foreclosures," said Boca Raton real estate Attorney Marlyn Wiener. "We're at a meltdown point and have to find new ways to manage the situation."

While Rome burns, the fiddling continues....

Originally posted to route66 on Tue Dec 29, 2009 at 04:35 AM PST.

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