My thought is that the forcing of mediation will do little to keep the average Florida resident from losing their home, unfortunately. The lenders are truly unwilling to negotiate as long as: their risk is minimal due to reinsurers, they continue to rake in profits on debt interest and selling the property after the foreclosure has occurred results in a better than break even. These are the reasons short sales rarely see fruition after months of negotiation. I was told that some large reinsurers insured for as much as 60% of loan amount. So if the lender gets the property back and sells it for 70% with $6,000 in attorney’s fees, they make a tidy profit. If the lender continues to hold the home in areas where the foreclosure rate is running rampant it in essence creats demand for the property which equates to a greater profit. I think the gov needs to pass an order whereas the prior owner in fee simple would be entitled to proceeds of sale which exceed the lenders cost. Therefore there would be no incentive for the bank to foreclose, which means investors would get a better deal after the lender had exhausted all means of keeping the owner in the home. This would also greatly speed up the process of short sales as it would alleviate the typical feet dragging.
