Just had brought to my attention a situation: what happens if there's no mediation?
What if a party doesn't provide a waiver, or doesn't pay the fee, or doesn't show-up? What happens if the mediation for some reason just doesn't happen? The FFA isn't clear on this.
The statute provides that the written certification, in which determinations of whether the participated in the mediation in good faith, only happens after the mediation session. Section (7)(9). So if there's no mediation, there's no certification.
And if there's no mediator's certification "stating that the mediation has been completed," the trustee may not record the notice of sale. Section (7)(13)(a).
So what happens to the parties?
Let me suggest there's a real problem here: the statute is perfectly ambiguous about what happens if a mediation doesn't occur. They simply didn't think it through. As we all know, that sometimes happens in The Leg. Stuff happens.
Here's the ambiguity - it's an ambiguity, so I wouldn't worry if my statement of it is hard to follow, because it's ambiguous! As now written, the statute provides that the certification comes after the conclusion of the mediation session. And yet a violation of the duty to mediate in good faith may include the "[f]ailure to timely participate in mediation without good cause" (Section 7(8)(a)), which can happen if a party fails to provide the waiver form or pay the fee or show-up. Yet if no certification can be made in that situation, because no mediation was held, how would such a finding ever be made? How could anyone ever be found to have failed to timely participate in a mediation if the mediation doesn't occur and a certification can't be filed? A paradox, for sure, which is what statutory ambiguities create.
The effect of "no mediation" is that the foreclosure can't occur, because the trustee may not record a notice of sale until the mediator's certification of a completed mediation. That makes some sense if it's the beneficiary who has failed to provide a waiver or pay the fee or failed to show.
But what if it's the borrower who doesn't provide the waiver or pay or show-up? Certainly it isn't the intent of the statute to allow a borrower to delay a foreclosure indefinitely by making sure no mediation happens by simply ignoring all the borrower's obligations under the statute! Yet as written, that's exactly what the statute allows - for a borrower to avoid foreclosure by avoiding mediation.
A legislative fix to clarify this ambiguity is simple: just make the certification necessary even if no mediation occurs. Amend Section (7)(9) to read
Within seven business days after the conclusion of the mediation session or, if no mediation occurs within 45 days of the mediator receiving the referral from the department, within seven days of the end of the 45 day period and any extension agreed by the parties, the mediator must send a written certification ... .
Then the mediator would certify that the mediation didn't happen because the borrower didn't do what the statute requires and failed to timely mediate in good faith. Easy-peasey.
But until that legislative fix happens, how could this play out?
If no mediation happens in the case of a beneficiary's failure, then the statute will be working as designed: no foreclosure will happen, because the beneficiary didn't do what the statute requires.
If this happens in the case of a borrower's failure, it will be incumbent on the beneficiary to take some sort of judicial action to try to get the foreclosure to move ahead. The borrower may claim that there can't be a foreclosure sale without a mediator's certification. So then the beneficiary would show that the certification didn't happen because the mediation didn't happen because the borrower failed to mediate.
Am I missing something here?
I was missing something. But I still like the idea that the certification should happen in the situation where no mediation happens.
What I was missing was this: Section 7(13)(a): "If the trustee does not receive the mediator's certification, the trustee may record the notice of sale after ten days from the date the certification to the trustee was due."
What that means is, if a borrower was uncooperative so that the mediation didn't happen, as I posited above, when the time passes with no certification being received, the sale goes forward. So the uncooperative borrower has the house sold out from underneath them.