Mediators: Lenders, Foreclosure Mills Stifle System By Pressuring Loan Modification Negotiations To End In Stalemate

The Palm Beach Post reports:

• Florida's Supreme Court sought a foreclosure lifeline in forcing banks and borrowers to mediation. It was hoped a judicial referee could help unclog court dockets and free struggling borrowers.

• But in documents obtained by The Palm Beach Post and described in a recent court order, mediators complain lenders and their attorneys are stifling the system by pressuring negotiations to end in a stalemate.

• In some cases, mediators report that deals were struck for trial payment plans or to seek a loan modification, but that banks or their attorneys asked for the meeting to be recorded as an impasse. The motive for a deadlock, homeowner advocates say, is money. Declaring a different outcome stalls the process and could mean a return to mediation if an agreement falls through. At the same time, several of the state's large foreclosure law firms also run title companies, which can pick up business when a home is repossessed.

For more, see Foreclosure mediators: Banks pushed us to fail.