Loan Modification Management Pilot Program
The United States Bankruptcy Court for the Central District of California has established a Loan Modification Management Pilot Program (“LMM”) . The LMM is designed to function as a forum for debtors and creditors to reach a consensual resolution when a debtor’s property is at risk of foreclosure. The goal of the LMM is to facilitate communication and exchange of information in a confidential setting and encourage the parties to finalize a feasible and beneficial agreement under the supervision of the United States Bankruptcy Court .
Who is Eligible
Any Debtor who currently has a case pending under any chapter is eligible to participate in the LMM Program with respect to any eligible property. Individuals who seek to modify a loan under the LLM must have paid their bankruptcy filing fee in full. In addition, the Debtor must set aside the applicable Document Preparation Software fee ($40.00), the applicable LLM Portal submission fee ($40.00), and one-half of the Program Manager’s fee ($300.00). Debtors will also be responsible for attorney’s fees in the amount of $2,500.00. This amount can be paid through the Plan in a Chapter 13 or Chapter 11.
The Program Manager
The Program Manager for the LMM Program is Default Mitigation Management, LLC (“DMM”) . DMM is an independent, nonpartisan organization that has demonstrable skill and experience in bankruptcy loss mitigation to assist the Court with managing the LMM Program. DMM has extensive knowledge of the forms and supporting documents required by creditors to complete a loss mitigation analysis and an understanding of the various loss mitigation programs offered by creditors and their availability to Debtors.
Advantages of using DMM
DMM operates a secure online portal that allows LLM documents and communications to be submitted, retrieved, and tracked between the various parties such as the Court, the bankruptcy trustee, the creditor, and the Debtor. Submitting documents to the portal provides transparency in the loan modification process by making information immediately available to all parties through a secure internet website. DMM also uses Document Preparation Software to ensure that the initial submission to the creditor is complete and accurate and should expedite the creditor’s review. No longer will you have to worry if the bank has received your paperwork. If the creditor requires any further documentation, they will communicate what they need through the portal.
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