Miami Chapter 13 Bankruptcy Lawyer - Chapter 13 Bankruptcy - New "Loss Mitigation Mediation" for Mortgage Modification in the Miami Bankruptcy Courts

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There is a new option for Miami (also Broward and Palm Beach Counties) homeowners who are facing foreclosure of the mortgages on their home and certain investment property. On April 1, 2013, the Bankruptcy Court in Miami added a new program for people filing for chapter 13 bankruptcy - "Loss Mitigation Mediation" (LMM) program for Mortgage Modification. This program allows for a formal process of mediation between the property owner and the mortgage lender.

This mediation program has been successful in about 80% of the cases in the bankruptcy courts in other parts of Florida which previously started this program. It appears that it will have a similar rate of success in the Miami Bankruptcy Court. This is a program to designed help the homeowners and investment property owners reach a mortgage modification agreement with his mortgage lender. One advantage of this program is that it provides for better communication with the mortgage lender in the process of negotiating a mortgage modification. A mediator is appointed by the Bankruptcy Court to help the parties negotiate an agreement.

As part of this process, an order is issued by the Bankruptcy Court requiring your mortgage lender to register with the internet portal and negotiate with you for a mortgage modification. The documents that are needed to be submitted to the mortgage lender for a mortgage modification are prepared on a special online program that streamlines the process. These documents are uploaded to a portal on the internet that is shared between the homeowner, mortgage company, and the mediator that is appointed by the Bankruptcy Court.

After the Bankruptcy Court enters its order requiring mediation, there are communications between the homeowner and mediator via the internet portal. Shortly thereafter, a meeting of the parties in person or over the telephone is set up with the mediator in attendance.

A brief outline of the procedures is as follows:

I. Pursuant to Administrative Order 13-01, the Bankruptcy Court for the Southern District of Florida has implemented a "Loss Mitigation Mediation" (LMM) program. The goal of LMM is to "facilitate communication and exchange of information in a confidential setting and encourage the parties to finalize a fesible and beneficial agreement with the assistance and supervision of the United State Bankruptcy Court."

II. The LMM is generally effective for individual cases filed or reopened or converted to an eligible chapter on or after April 1, 2013. The Court has implemented LMM Program Procedures and Local Forms.

In chapter 7 an individual debtor may request LMM to surrender real propery and in chapter 13 an individual debtor may request LMM to modify a mortgage or surrender real property.

III. Participation in the LMM program will require use of a secure online LMM Portal and Document Preparation Software that facilitates the preparation of the loan modification package. All communication between the parties is to be sent through the LMM Portal

IV. To participate in LMM, an eligible debtor must file within 45 days from the petition date a local form "Attorney-Represented Debtor's Verified Motion for Referral to Loss Mitigation Mediation" and an attached form order, Order of Referral to LMM. Prior to the filing of this motion the debtor's information must be submitted and processed through the Document Preparation Software and Debtor's initial loan modification forms are to be ready for signature and submission.

The debtor or the lender may seek LMM.

Co-obligors and co-borrowers must participate in the LMM process if requested. The "Consent to Attend and Participate in Loss Mitigation Mediation" is prepared.

Within 7 days after entry of the Order of Referral to LMM the Lender will confirmation that the
"Lender's Initial Package" is availabe on the LMM Portal.

V. Filing a request out of time

VI. Additional parties such as co-obligors and co-borrowers must particiate in the LMM.

VII. Order of referral to LMM

VIII. All parties are required to attend the LMM conference and be authorized to settle all matters requested in the Verified Motion. The parties attending the LMM conference shall be ready, wiling and able to sign a binding settlement agreement at the LMM conference.

The initial LMM conference is not to exceed one hour. The second LMM conference if required shall also not exceed one hour.

IX. The automatic stay is to be modified to the extent necessary to faciliate LMM. Pending motions for stay relief with respect to the property shal be continued until such time as the LMM has been concluded.

X. If the parties reach a final resolution or if no agreement has been reached the Mediator shall report the results on the LMM Portal and file the "Final Report of Loss Mitigation Mediator" with the Court. If a resolution is reached at the LMM conference, the local form "Motion to Approve Loss Mitigation Agreement with Lender" is to be filed.

XI. Certain wording is to be included in a chapter 13 plan where mortgage modification is sought as part of LMM in a chapter 13 case. The plan language provides that while the LMM is pending and until an agreement is reached, the debtor is required to include a post-petition plan payment of no less than 31% of the debtor's gross monthly income as adequate protection. Objection to lender's proof of claim are to be held in abeyance. If a settlement is reached an approved by the Bankruptcy Court, the debtor is to amend or modify the chapter 13 plan to reflect the settlement. If there is a failure to reach a settlement, the debtor is to modify the plan to conform to the Lender's proof of claiim or provide for a surrender of the property.

XII. The Mediator is to be slected from the Clerk's Register of Mediators. The debtor and the lender are to each pay the Mediator $300.00. Jordan E. Bublick is a Miami Personal Bankruptcy Lawyer with over 25 years of experience in filing chapter 13 and chapter 7 bankruptcies. Miami Personal Bankruptcy Lawyer Jordan E. Bublick has filed over 8,000 chapter 13 and chapter 7 cases.