On April 1, 2013, the United States Bankruptcy Court For The Southern District Of Florida started the Bankruptcy Loss Mitigation Mediation Program. The LMM Program was developed to provide another option for debtors dealing with lenders. The stated goal of the LMM Program is to “facilitate communication and exchange of information in a confidential setting and encourage the parties to finalize a feasible and beneficial agreement with the assistance and supervision of the United State Bankruptcy Court.”
The LMM Program will generally be effective for personal cases filed or reopened or converted to an eligible chapter on or after April 1, 2013. In Chapter 7 Bankruptcy Cases, you may request the LMM Program to surrender real property and in a Chapter 13 Bankruptcy you may request the LMM Program to modify a mortgage or surrender real property.
Participation in the LMM program will require use of a secure online LMM Portal and Documentation Software that aids in the preparation of the LMM Program Loan Modification Package that is submitted to the lender. All communication between you and your lender happen through the LMM Portal, this reduces the chances of documents not being timely provided or inquires going unanswered.
To participate in the LMM Program, you must prepare, sign and have ready to upload all the necessary documents to the LMM Portal. You must then file, within 45 days from the date your petition is filed, a Verified Motion for Referral to Loss Mitigation Mediation and an Order of Referral to the LMM Program. Either you or your lender has the right to seek referral to the LMM Program. If you have a co-borrower, who is not filing bankruptcy with you, they must agree to participate in the LMM process.
The Bankruptcy Court requires that all parties attending the LMM conference have authority to settle all matters requested in the Verified Motion for Referral to Loss Mitigation Mediation. The LMM Program rules require that all parties attending the LMM conference shall be ready, wiling and able to sign a binding settlement agreement at the LMM conference. The actual LMM Conference is limited to one (1) hour. If necessary a second LMM Conference can be scheduled, but it too is limited to one (1) hour. If the parties successfully reach a resolution or if no agreement has been reached the Mediator shall report the results on the LMM Portal and file a Final Report of Loss Mitigation Mediator with the Court.
If you have previously been denied a loan modification because of excess debt the LMM Program may help you save your home.
Benefits of LMM Program
Electronic submission of loan modification paperwork by your attorney – which should eliminate claims by lenders that they did not receive documents.
Mandatory Mediation between you and a qualified decision-maker for your lender.
If you do not qualify for a federally sponsored loan modification program you may qualify for a bank-sponsored program, if available.
Court ordered deadlines for lender and debtor to help facilitate potential resolutions
Court ordered process that ensures the timeliness and due process that is not present in a typical loan modification scenario
If you are interested in learning more about the Loss Mitigation Mediation Program available through Bankruptcy, please contact us for a FREE Consultation.
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