WSBA Alternative Dispute Resolution

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A small workgroup meeting was convened to discuss issues about application of the Net Present Value tests in FFA mediations. That group ballooned into an all-stakeholder process for considering legislation to implement technical changes to the FFA.

This discussion is a summary of that process. I'll be adding material to this discussion as the meetings continue, so be sure to click the "follow" link below this discussion if you want to stay apprised.

Immunity & Waiver: 2011 Special Session Emergency Bill - HB 2163 / SB 5988

In the past week we had heard of interest in a bill to be considered during the 2011 Special Session to implement some of the more pressing changes on an emergency basis. Those issues were:

  • implementing immunity from liability for mediators
  • removing the waiver form from the convening process and adding stronger language to keep mediators from being subject to discovery or compulsory process to testify in litigation regarding any foreclosure action (improving on the exclusion of the mediator as a "live witness."

By providing for mediator immunity, this bill would enact the ADR Section's proposed language to our first priority issue (see the proposed amendments the Executive Committee approved here). 

The bill had first reading on Friday December 9 and will be subject to hearing on December 12. You can track their information pages here: HB 2163 / SB 5988

The discussions in the stakeholder workgroup on December 7 focused on this emergency bill. Initially we were concerned that by implementing this bill we may not be able to address our other two important issues: mediator privilege and reincorporating the UMA. We were assured in those discussions that our other issues will be addressed in the on-going discussions that are heading toward another, more extensive technical-fix bill to be introduced in the 2012 Regular Session.

This bill has the consensus agreement of this all-stakeholder workgroup.

Other Issues: 2012 Regular Session 

I've attached the position papers of the various caucuses within the all-stakeholder workgroup.

Before the next stakeholder meeting December 14, we should have new versions of these papers organized in chronological process order and referring to the FFA's RCW codification numbers. We'll be revising ours, too. Watch for those to be posted here as comments to this discussion.

I'm cautiously optimistic that in these on-going discussions we'll reach consensus on our other two proposals - mediator privilege and reincorporating the UMA to do it.

Here's some of the high-points of some issues being raised by the other caucuses:

  • A clarification of how and when NPV tests are used
  • Adjusting the timelines of information exchange
  • Payment to mediators for the referral, not just a mediation session
  • Industry would like some sort of judicial review process following certifications of bad faith
  • Washington Mediation Association would like non-lawyer, non-DRC mediators to be able to do FFA mediations (current proposed language is "independent professional mediators")
  • WSBA RPPT has several technical fix proposals, including what the beneficiaries' rights are to conduct a non-judicial foreclosure following a bad-faith finding
  • WSBA RPPT and industry are interested in clarifying the FFA in bankruptcy cases 
  • Industry recommends more detailed disclosures from the borrowers coming with the referral to mediation
  • Industry wants affordability and eligibility to be considered before NPV tests
  • Industry wants to close a loophole that allows a borrower to reject a loan modification offered by the beneficiary and still enjoin the foreclosure
  • Industry wants no more mediation agreements
  • Industry wants recusal of mediators
  • Clarification of trustee's duty of good faith when foreclosing on a property after a bad faith certification

As these discussions continue, there may be opportunity for the Legislative Committee to consider some of these proposals and possibly recommend them to the Executive Committee for taking an official position. If so, that will most likely happen soon after the December 14 meeting, and another possibility is right after the January 7 meeting.

Tags: 2011, 2012, FFA, Foreclosure, Mediation, Technical

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Here's a discussion on how we might revise/redraft our UMA privilege to work with the new language of the FFA when the emergency bills are passed to provide for mediator immunity.

Just realized we need the WSBA RPPT's position paper available in this discussion. Download it using the link below.

Attachments:

Also missed uploading the Homeowner Caucus's proposed changes. Here it is in the link below.

Attachments:

Quick notes on Homeowner's Proposed Changes. Many of them seem like good technical improvements, and if so, we may be able to lend our support to help get them through.

2(a): Timelines. With the improvements coming already with the emergency bill (removing waiver forms and the need for mediation agreements) I think 45 days is enough, especially since it can be extended by agreement. I'm very wary of granting the mediator discretion to extend over a party's objection - that sets us up for acting in a way that favors one party and compromises our impartiality.

2(b): Document requirements. Not keen on treating parties differently based on whether they're represented or not. That was their choice - it's not our place to "protect" them if they don't feel the need to be protected. Again, being put in that position compromises our impartiality. If the solution is that unrepresented borrowers aren't being protected, compromising us is not the solution - getting them low- or no-cost representation is. Here I suggest we propose that the parties can waive document requirements by agreement - period (no mention of the mediator). Party self-determination!

2(e-f): immunity and waiver: these were already agreed and dealt with in the emergency bill.

2(i): Mediation in judicial foreclosures. I think the industry is going to have a problem with this! My first thought is we take "no position."

2(j): Conflict of Interest. Didn't know this was a problem, but there's an easy solution: the UMA's conflict of interest section is very clear. Another reason to reincorporate the UMA.

And to add to all of this please note the following:

This morning Rep Pedersen suggest amending the proposed amendment on the immunity as follows:

On page 7, line 35, after "section" insert "who is an employee or volunteer of a dispute resolution center under chapter 7.75 RCW"

The substance is that there would be no immunity for private mediators who are not volunteers of a DRC.

Comments please !!!

If you have any comments about this last-minute amendment limiting immunity to DRC mediators only, please post them in this discussion here. We hope to tee-this up as an e-vote.

FYI, the ExecComm passed unanimously, on very short notice, an e-vote to oppose formally any amendment of the Foreclosure Fairness Act which provides less protection for all foreclosure mediators than the immunity provision as provided in HB 2163/SB 5988.

FYI, the legislature passed the bill today with the Pedersen amendments. We still will be able to address immunity for lawyers, judges, and other non-DRC mediators in the all-stakeholder work group that's working toward an all-issues technical fix bill in next year's regular session.

In preparation for tomorrow's meeting, one of the stakeholders put together a timeline with all caucuses issues and proposals (or at least that was the intent). It's very helpful. Ours are in it.

My highlighting system: green for things that look good that we might or are supporting; yellow for things that cause me concern or have questions about.

I hope we get greater clarity at the meeting tomorrow and are able to come back to the Legislative Committee with some ideas for proposals we may be able to lend our support to (or need to raise opposition to). Paul's looking to schedule that meeting for either Thursday or Friday before ExecComm's Friday midday meeting.

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