The Bankruptcy Mortgage Modification Mediation Program essentially creates a streamlined process for negotiation between borrowers and mortgage providers in the course of a Chapter 13 bankruptcy plan. Those going through Chapter 13 bankruptcy set up a court-approved repayment plan over a three to five year term that involves the rescheduling of many types of debts (this usually means lower payments, and the complete discharge of certain obligations at the end of the repayment term).
While Chapter 13 bankruptcy can be hugely beneficial, it does have shortcomings: typically, a Chapter 13 proceeding alone does not help homeowners secure lower mortgage payments. The new Florida modification program has helped fill in this gap.
Participants in the program enter a fast-tracked negotiation with lenders that is facilitated by the bankruptcy court. While a mortgage modification is not guaranteed, the ease and low cost of the new program is attractive to lenders growing weary of the headaches of foreclosing on and reselling homes in a depressed real estate market.
So far, 90 percent of homeowners who entered the program have secured a mortgage modification. Many of them have gotten new mortgage terms that will result in interest payment savings of up to $100,000 over the life of their loan. One out of five homeowners in the program received a reduction in principle loan balance – for some of them, six figure savings.
Mortgage Modification Program on Its Way to Other Florida Areas
Florida’s new program is set to expand into several different counties . If it continues to be a success, it could become statewide by the end of 2013.
Although the mortgage modification program offers a lifeline to many homeowners, it can be complex and has stringent eligibility criteria, including the requirement that homeowners who wish to engage in the program file a Chapter 13 bankruptcy petition. If the new program sounds like it may be of interest to you, contact a attorney Lloyd Barron Law Esq. for your legal options. Please Keep in mind for quality purposes we will only accept a we can only accept a certain amount of files, first come first serve.12