Lenders are currently working through the huge backlog of borrowers that have fallen behind on their payments and have already repossessed nearly 528,000 homes in the first half of this year. If this pace continues, 2010 could see over 1 million foreclosures, an even greater number than 2009's record of over 900,000 repossessions.

Lenders set the pace for the foreclosure process and are trending toward allowing borrowers to stay in their homes for longer periods of time as the banks attempt to work through their current backlog. According to Lender Processing Services Inc., a mortgage tracking company, it takes on average about 15 months for a home loan to go from being 30 days late to the property being foreclosed and sold. The amount of foreclosures in a given area and other factors will also affect how long borrowers have before their homes are repossessed. Florida, for example, is among the states with the highest rate of foreclosure so there are more cases to push through an already overloaded system. In Palm Beach County, a recent Administrative Order now requires the borrower and lender to attend mediation for all foreclosures filed against a homestead residence. It remains to be seen whether the new mandated foreclosure mediation program will affect the pace of the foreclosure process.

High rates of unemployment and lowered incomes are forcing many homeowners into foreclosure. Strategic defaults are also accounting for a large percentage of new foreclosures. With the weak housing market, people are seeing their home values plummet. They are faced with a situation where they are paying far more on the home than it is worth and many borrowers in that situation are choosing to simply walk away from what they consider a bad investment. According to a recent New York Times article wealthier owners are more likely to walk away from a home they consider a bad investment.  The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent. Fannie Mae and Freddie Mac, the two quasi-governmental mortgage finance companies are trying to discourage this behavior by making it harder for strategic defaulters to receive one of their loans in the future. Overall, it seems that unfortunately "the downward pressure from foreclosures will persist and prices will be very weak well into 2012," said Celia Chen, senior director of Moody's Economy.com

Administrative Order No. 3.308-6/10 has been passed by the Fifteenth Judicial Circuit of Palm Beach County and is effective as of July 12, 2010. Pursuant to this order, all residential mortgage foreclosure actions filed in the Fifteenth Judicial Circuit against a homestead residence shall be referred to the RMFM Program (Residential Mortgage Foreclosure Mediation Program.) The RMFM Program will be managed by the Palm Beach CountyBar Association. For purposes of this Order "Homestead Residence" is defined as a residential property for which a homestead real estate tax exemption was granted according to the certified rolls of the last assessment by the county property appraiser prior to filing of the suit to foreclose the mortgage.

In actions to foreclose a mortgage on a homestead residence, the plaintiff and borrower shall attend at least one mediation session, unless the plaintiff and borrower agree in writing not to participate in the RMFM Program or the Program Manager files a notice of borrower nonparticipation.

At the discretion of the presiding judge, this Order may apply to homestead residential foreclosure actions filed prior to the effective date of the order, for residences which are not homestead residences, or for any other residential foreclosure action the presiding judge deems appropriate.