Fort Lauderdale Bankruptcy Mortgage Mediation

Mandatory mediation is coming to Fort Lauderdale bankruptcy cases to require real estate lenders to come to the table to discuss modification.  The mandatory mediation will apply in the Southern District of Florida. This will include any Miami bankruptcy and West Palm Beach bankruptcy case.   Debtors will have the right to obtain a court order in chapter 13 bankruptcy cases.  (The new procedure will apply to chapter 7  only as to surrendering property.) The new program will apply to all cases filed after April 1, 2013 (and for a limited tme debtors can file the request for cases filed prior to April 1,2013).

A structure will be set up where the lenders can’t just say “we didn’t receive your documents”  because there will be proof of sending the documents through the cloud, an online portal for uploading the modification request and all supporting documents.  (At least this is the theory).  This online portal actually has existed for bankruptcy attorneys to submit modifications to participating lenders, but now the procedure will be mandatory if the debtor requests.  Lenders will not be able to just ignore modification requests.

Note that this procedure still does not require the lender to actually approve the modification, but the new system will hopefully lead to more successful modifications.

Stay tuned for further updates.

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