Can Florida’s Loss Mitigation Mediation Program Help Me?

toy house on life boat saverOn April 30, 2013, the United States Bankruptcy Court for the Southern District of Florida initiated the Loss Mitigation Mediation (LMM) program. The program is designed to provide a forum for Debtors who have an interest in real property and are obligated on the promissory note or mortgage to explore modifying a mortgage or surrendering the property. The goal of LMM (which soon will be known as MMM (Mortgage Modification Mediation)) is to promote communication and exchange of information between debtors and lenders with the court’s supervision.

Absent court order for bankruptcy cases that were filed prior to April 30, 2013, LMM/MMM is available for bankruptcy cases filed or reopened after April 30, 2013 as follows:

  • Currently, an individual Chapter 7 debtor may request LMM to surrender any real property that the debtor has an interest in. However, once the program is officially changed from LMM to MMM, Chapter 7 debtors will also be able to request MMM to modify a mortgage.
  • An individual Chapter 11 debtor can request LMM to modify a mortgage or surrender real property that the debtor has an interest in and is used as the debtor’s primary residence.
  • An individual Chapter 13 debtor may request LMM to modify a mortgage or surrender any real property that the debtor has an interest in.

The debtor, the lender, or the court may request referral to LMM.

There are a number of advantages of the LMM program:

  • It provides a central portal where the documents required by the lender are available to each party and the mediator, reducing the frustration of sending documents multiple times because they were lost.
  • It brings the parties before a neutral mediator, under the supervision of the bankruptcy court, increasing the probability of a resolution.
  • There is a court-imposed good-faith requirement, which also acts to encourage the parties to reach an agreement.

Please keep in mind that every bankruptcy matter is different. If you have questions about the LMM/MMM program, or filing for bankruptcy protection, and would like to schedule a no-cost consultation, please contact our office by completing the form on this website or calling us at (954) 280-5066.

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