Creditors take note; the Southern District of Florida Bankruptcy Court recently revised procedures for its Mortgage Modification Mediation Program. The new changes relate to individual debtors who are unable to settle at mediation with the lender for real property in which the debtor has an interest or is obligated on a mortgage or promissory note.
The revision affects debtors filing under chapter 12 or 13 and is triggered when a creditor fails to settle at mediation with a debtor. A debtor is now required to show one of the following: (1) if a proof of claim has been filed, the debtor must conform to it; (2) provide that the real property at issue will be “treated outside the plan”; or (3) provide that the debtor will surrender the real property. The debtor must make these amendments or modifications within fourteen days after the mediator files his final report. For individual debtors choosing to conform to the creditor’s proof of claim, the debtor may still object to the claim and proceed with a motion to value.
The Mortgage Modification Mediation Program provides mortgage modification options for creditors and debtors. Its goal is to encourage and facilitate settlement with the assistance of the Bankruptcy Court.