Hi and thanks for asking your question. If the HOA is willing to settle, then it sounds like they are feeling some potential liability if the case went to trial. That's a good thing. If you add up your expenses incurred over the 8 months, how close are they to your $4,400 demand? Also, keep in mind that at mediation neither sides gets exactly what they want. Each side has to compromise to a certain extent, in order to settle the case.
Thus, let's assume that $4,400 represents 100% of your recovery in an ideal world. At a mediation, you would most likely not recover 100%. If $4,400 is your actual costs to date, and the HOA is unwilling to pay that amount, you have to decide whether it's better to offer something lower and reach settlement or hold fast to the higher number. I think it's usually a better idea to settle and get out of litigation.
Come down a little bit and try to find their magic number. Mediation is like a poker game. Each side has to throw numbers back and forth to get some idea where the other side might be willing to settle. In your case, if $4,400 didn't work and you feel strongly about your case, maybe try $4,000 and see where that goes. Then go down a little bit at a time until you don't want to go any lower. At some point in the negotiations, you will get a good feel for where the HOA is willing to go to settle.