The Bankruptcy Court for the Middle District of Florida has recently adopted a uniform Mortgage Modification Mediation (MMM) process that applies to all debtors in all chapters of bankruptcy, for any type of real property. The new MMM is effective August 15, 2014. The new MMM broadens the scope of loans that can be compelled to mediation, as the prior mediation program in the Middle District was limited to homestead properties. Now investment properties will be subject to MMM. The MMM is also not limited to consumer/individual bankruptcy filers and could apply to entities that file bankruptcy.
As with the prior mediation program, the bankruptcy debtor has option of requesting MMM through the filing of a motion, and if such a request is made, referral to mediation is preferred by the Courts. If the motion requesting MMM is timely filed, the Court will grant the request and enter an order directing MMM. Lenders must show “good cause” for the court to reconsider the request for MMM.
What this means is that lenders who have claims that are secured by any type of real property should be prepared to mediate if their debtor files bankruptcy. As with any other civil mediation, the MMM does not require the lender to accept any particular loan modification during mediation, though it does require the lender to consider the debtor’s financial disclosures and what loss mitigation options might be available based on those financial disclosures. The benefit to the MMM in bankruptcy court is that the debtor is required to provide financial information in advance of the mediation or run the risk of the mediation being cancelled.
For a complete copy of the MMM Procedures, click here.
My practice includes the representation of financial institutions, banks, insurance companies, business owners and other corporate clients. I have a growing and focused practice dedicated to helping financial institutions navigate the complex and expanding area of government regulation and compliance with federal and state laws. This includes working with financial institutions to prepare best practices policies, procedures, and forms, as well as advising financial institutions as to avoiding litigation. When necessary, I will also represent those same institutions in court. I enjoy keeping current with the news and issues that affect banks and financial institutions in their business, and sharing that information along with my thoughts on the issue from a legal perspective based upon my experience.
My firm, Zimmerman, Kiser, & Sutcliffe, P.A.* is a full-service law firm located in Orlando, Florida. Established in 1984 and consistently recognized as one of the largest firms in Central Florida, our firm maintains a respected reputation within the southeast U.S. business and legal community. Our more than 30 attorneys provide comprehensive legal representation in an extensive range of practice areas including corporate, tax, real estate, litigation, banking and financial institutions, structured finance, bankruptcy & creditors’ rights, estate planning & probate, and workers’ compensation.
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