On February 1, 2017, the United States Bankruptcy Court for the District of Arizona implemented the Mortgage Modification Mediation Program. The program seeks to assist homeowner’s in achieving a home loan modification, if at all possible, thru a mediation program that is overseen by the court. The program is only available to individuals who file for protection under Chapter 13 of the United States Bankruptcy Code and meet certain eligibility requirements.
Not all homeowner’s will be eligible for the program; however, the program can prove to be extremely beneficial to those who are. The program was created as a way force lenders to come to the table in good faith to enter into meaningful negotiations to modify a mortgage. It is a way to get the parties talking. Oftentimes, homeowner’s who attempt loan modifications on their own find themselves in an endless circle of providing documents and trying to prove documents were sent finding no success whatsoever. The Mortgage Modification Program is designed to help alleviate these issues and utilizes systems to track documentation to end the vicious circle.
However, it is of extreme importance to understand that the court cannot force the lenders to enter into any sort of mortgage modification. The court requires lenders to act in good faith and oversees the modifications filed with the Court. As a result, there has been much success with the program to date. Successful negotiations have provided for reduced mortgage payments, forgiveness of delinquent payments, and in rare circumstances reductions of the principal mortgage balance.
Another advantage for homeowners who are delinquent on payments is that although you may be unable to achieve a modification thru the bankruptcy court you may be able to utilize the Chapter 13 bankruptcy filing to reorganize your debts in such a manner that you are able to cure the arrearages over the life of your Chapter 13 plan. There are several tools available to homeowner’s, whether it be bankruptcy or some other choice. It is important to meet with a competent attorney to understand all available options to you and the detailed components of these programs. Additionally, attorney Jillian Hindo has served as a Mortgage Modification Mediator for the District of Arizona since February 1, 2017. Contact Hindo Law Group, PLLC at (602) 377-9369 to set up a free consultation with an experienced attorney to learn what options are available to you.
Disclaimer: The information in this web site is not intended to constitute legal advice or to create an attorney-client relationship. The information, documents or forms provided herein is intended for general information purposes only and must not be regarded as legal advice. Laws change periodically; therefore the information in this site may not be accurate. It is imperative that you seek legal counsel in order to ascertain your rights and obligations under the applicable law and based upon your specific circumstances.