The Mortgage Modification Mediation program in the Arizona Bankruptcy Courts is approaching its one-year anniversary. In celebration, the Bankruptcy Court judges have approved revisions to the Procedures that govern the program.
First, the approved fees for Debtors' attorneys has been increased from $1,750 to $2,500, for cases in which the MMM Motions filed ON or AFTER February 1, 2018. This is the amount that is paid in other jurisdictions that participate in a near-idential MMM Program.
Second, the Debtors may apply for the fees upon: 1) the entry of an Order Approving the Trial Loan Modification Agreement, or 2) the filing of a Mediator's Report stating that no agreement was reached.
Other changes include:
- Automatically extending the deadline for completing the MMM Program to 60 days after the last of the trial loan modification payments. This change is to allow time for the Lender to consider and offer a Final Loan Modification proposal once the trial loan payments are complete, and for the Debtors to accept that proposal and get it approved by the Bankruptcy Court Judge. These additional 60 days were included in a change made last year to the standard forms for the Motion to Approve the Trial Plan and the accompanying Order
- There is no longer a deadline for filing a Motion for participation in the MMM Program, that was primarily applicable to cases filed prior to February 1, 2017.
- If the Debtor files a MMM Motion (aka a Motion for Referral to the MMM Program), in response to a Motion for Relief from Stay, the lender is presumed to object, and the Debtor must serve a copy of the MMM Order on the Mediator, the Lender and the Lenders' attorney, and also then file a Certificate of Service with the court. (The service Requirements are in Paragraph VII(A)(7)(b)).
- If there is a non-filing co-borrower/co-obligor/third party, the Debtor must obtain written consent by that third party to participate in the MMM Program (Note: This is Official Form # 6).
- Payment of the Mediator's Fees by both the Lender and Debtor has been mandatory. A new provision in Section IX(A)(2) states that: "[The Debtor's] failure to timely make such payment may result in a summary dismissal of the MMM Proceedings under Section XV(F)(2)." Similar language is in Section XI(B)(2) and is applicable to Lenders. The enforcement provision is in Section XV(F)(2), which provides that if the Mediator is not paid by either party within 21 days after receiving payment instructions from the Mediator, the Mediator may file a Motion to dismiss the MMM proceedings, which may be summarily granted.
- The Mediator may seek an agreement of the parties to delay setting the Initial Mediation Conference past the standard deadline, which is 90 days after the court signs the MMM Order. This will help in those cases where the time required to satisfy the Lender's requirements takes longer than normal.
Note: This website is for general information only, and is not intended to convey legal advice.