The Florida Supreme Court issued an order Monday, December 19, 2011, terminating the mandatory mediation program it created in 2009 as an emergency measure to deal with the foreclosure flood in Florida. While individual circuits can create localized mediation programs or refer foreclosures cases to mediation on a case-by-case basis, and some programs commit to remaining active, the statewide program will receive no new referrals as of yesterday.
Without commenting on whether this is a good or a not-so-good move, I wanted to highlight some of the design and evaluation elements that other mediation programs, including but not limited to foreclosure programs, might want to consider from Florida’s experience.
- Gather all stakeholders to develop the program’s goals, design a process that will meet those goals, and review regularly the outcomes against the goals. A few months ago, a working group that received input from borrower and servicer representatives, as well as mediators, judicial employees, and government officials, analyzed challenges within and proposed changes to the program in a report to the Florida Supreme Court. The group was able to focus on the goals of the program and analyze them against the expense, the process, the caseload, and the outcomes of the program. They also were able to hear from other stakeholders who wanted to keep, but change, the program or terminate it. Such a working group is helpful at all stages of the development, implementation, and evaluation process, so that a program has a continuous feedback loop of information about what works and what doesn’t.
- Consider whether an opt-out program is the most efficient and effective use of resources, especially in a high-volume case type. Consumer advocates have called for foreclosure mediation programs to be mandatory for all borrowers, unless a borrower opts out. The theory is that the more people get into mediation, the greater the number of people who get to keep their homes. The mandatory nature of Florida’s program meant that over 73,000 borrowers needed to be scheduled for mediation, notified of the mediation, and sent through the process until completion. With such a large caseload, it would be difficult for any program to contact every borrower, let alone mediate every case to completion. As Florida’s statistics demonstrated, less than half of borrowers were contacted and fewer appeared at mediation. Of those who completed mediation, 25% reached agreement. In jurisdictions with smaller caseloads, like Philadelphia (about 9,000 cases last year), they may have the capacity for a mandatory program. So, before a program decides that every case should go through mediation, the program must look at its capacity to manage such a mandate. If the capacity isn’t there, the program might consider screening tools that would help determine what cases are most appropriate for mediation.
- Develop robust outreach to educate people about their options. No matter how well-designed a mediation program may be, if few people know about it, it won’t be seen as a success. A program should consider, too, how potential participants receive information about the program. For instance, a borrower may no longer be opening his mail, because he receives so many paper notices from the lender that he does not have much hope of what the mail contains. So, even if a notice of scheduled mediation offers some hope, he may never read it. But, if a city worker from the borrower’s neighborhood comes to his door offering free assistance through a mediation program, he may respond affirmatively. Along with the method of outreach, programs should examine who shares the information. Borrowers may be hesitant to participate in yet another program their lender offers, but if a neutral mediation center or a court calls them to offer free mediation services, they may be more interested.
Cases already referred to the Florida program as of December 19, 2011, will be scheduled for mediation. After that, local judges can exercise discretion to determine how to manage the foreclosure cases in their jurisdictions.