Since the Great Recession, our Country has been facing a housing crisis the likes of which have never been seen before. In 2009, the Honorable Chief Judge Cecelia Morris of the Southern District of New York implemented a Loss Mitigation Program to assist Debtors pursuing loss mitigation options with their Lenders.
From there Bankruptcy Courts such as the Eastern District of New York, District of New Jersey and the District of Rhode Island also implemented similar loss mitigation programs. These programs contain strict deadlines and require status hearings with the Court to help keep the process on track.
In 2010, the Honorable Chief Judge Karen S. Jennemann of the Middle District of Florida implemented the Mortgage Modification Mediation Program with the same goal of facilitating loss mitigation attempts focused on mortgage modifications in a smooth and timely manner. Soon thereafter, the Southern District of Florida and Northern District of Florida began programs.
In February of 2014, Florida held the first ever Statewide Mortgage Modification Mediation Summit. As a result, Florida now has uniform timelines throughout the State and the mandatory use of the DMM (Default Mitigation Management) portal, an effective tool that assists in exchanging documents and confidential communications.
The Florida model facilitates compliance from both debtors and lenders and maximizes judicial economy. The Eastern and Western Districts of Wisconsin, Western District of Pennsylvania, Southern District of Indiana and District of South Carolina now have mortgage mediation programs.
The goal of a more uniformed process assists lenders in processing and training their mortgage modification personnel to effectively complete the process. The more modifications, the more homes that are saved, the more Chapter 13 filings, and increased revenue streams to the lenders benefit all parties concerned. All constituencies gain by partnering together under the auspices of the Judiciary.
Bringing together judiciary and professionals with the goal to solve the national housing crisis, with Court oversight, makes the mortgage modification process work.