The Mortgage Modification Mediation Program
by Matthew Grech | Jan 4, 2016 | Article |
The Bankruptcy Court, Northern District of California has recently instituted the Mortgage Modification Mediation (“MMM”) Program, which offers individuals a unique opportunity to enter in to direct discussions with their lenderin an effort to explore mortgage modification options. What makes the MMM Program unique is that the modification process takes place under the supervision and control of the Bankruptcy Court and a neutral mediator, which helps avert many of the problems and pitfalls associated with a “traditional” mortgage modification.
The traditional mortgage modification process usually consists of a home owner submitting an application and supporting documents directly to her lender without any oversight, and this is what, in part, leads to so many problems. To begin with, many homeowners have experienced lengthy delays associated with the processing of their applications. Although recent federal mortgage servicing rules take aim towards reducing these delays, they are still a reality for many borrowers. Next, lenders are notorious for asking homeowners to submit the same documents over and over again because, for example, the lender has either lost the paper work or the documents have become outdated due to the lender’s failure to timely process the application (as outlined above).
The goal of the MMM Program is to facilitate communication and the exchange of information between borrower and lender in a confidential setting in order to encourage the parties to finalize a feasible and beneficial mortgage modification, and thus minimize, if not eliminate, the issues that can arise with traditional mortgage modifications. The primary way in which the MMM Program attempts to eliminate these issues is through the use of a web portal. The portal provides a streamlined means of communication between homeowner and lender, wherein, amongst other things, all of the necessary documentation can be submitted via a secure web platform where submission can be verified and viewed by all interested parties. Further, and just as importantly, if an issue does happen to arise, the Bankruptcy Court can be summoned to intervene and assist.
In order to take advantage of the MMM Program a homeowner must have a Chapter 13 Bankruptcy case pending in the San Francisco, San Jose, Oakland or Santa Rosa Divisions of the Northern District of California Bankruptcy Court, at which time an individual may then seek referral to the MMM Program.