Many of our clients are having tremendous difficulty paying for the mortgage(s) on their homes.  A modification of a mortgage can assist individuals who fell behind or cannot pay the current amounts due on their mortgage, and can put these individuals in a more manageable payment situation.
 
Prior to April 1, 2013, there was not much that could be done for these individuals within the confines of bankruptcy, at least in the United States Bankruptcy Court for the Southern District of Florida.  Individual debtors in Chapters 11 or 13 with mortgages on their primary residences were limited to the options of curing all arrears over a period of time and maintaining the current mortgage payment (an option that was usually not feasible) or treating the mortgage(s) outside of the bankruptcy, which typically resulted in relief from the automatic stay for the lender and a race to procure a successful mortgage modification prior to a foreclosure sale, if at all.
 
In Chapter 7, the options were even fewer.  Other than a brief respite from foreclosure due to the automatic stay, there were no options for these individuals, at least within the bankruptcy context.  Again, these borrowers were left with whatever tools existed outside of bankruptcy.
 
However, on April 1, 2013, the United States Bankruptcy Court for the Southern District of Florida implemented the Loss Mitigation Mediation (LMM) program.  The LMM program provided for a structured mortgage modification process, by which there was an ongoing communication between the borrower, lender and mediator.  On August 1, 2014, the LMM program was replaced by the Mortgage Modification Mediation (MMM) program.
 
Here are answers to some common questions our clients have asked about the MMM program:
 
According to the MMM Program Procedures, the program is "designed to function as a forum for individual debtors to explore mortgage modification options with their lenders for real property in which the debtors have an interest or are obligated on the promissory note or mortgage.  The goal of MMM is to facilitate communication and exchange of information in a confidential setting and encourage the parties to finalize a feasible and beneficial agreement with the assistance and supervision of the United States Bankruptcy Court for the Southern District of Florida.  Mortgage Modification Mediation options include modification of a mortgage or surrender of real property owned by an individual debtor(s)."

No - actually, the MMM program is available to any individual debtor in ANY chapter, including Chapters 7, 11 and 13.

Actually, this is incorrect, as well.  The MMM program is available for ANY real property owned by a debtor, whether the property is the debtor's primary residence or an investment property.  With regard to investment properties, there are other tools available within the bankruptcy context, including reducing the principal mortgage balance(s) to the value of the property, with some limitations.

In this situation, we can still strip off and remove any junior mortgages that do not have any equity.  These mortgages would generally not have to go through the MMM program because they would be rendered unsecured - with some limitations and exceptions depending on the individual circumstances.

The MMM program gives the loan modification more structure, and gives the lenders more accountability.  Have you ever gone through a loan modification process where the lender claims that they never received your documents, when you know that you sent them to the lender?  The MMM program virtually eliminates that concern, as all documents are uploaded to a secure online portal (the "MMM Portal"), which ensures that the initial submission to the lender is complete and accurate, and expedites the lender's review.  The use of the MMM Portal eliminates the need for multiple submissions of documents that were not received and unnecessary delay based on incomplete documentation.

Also, the bankruptcy itself can alleviate the lender's concerns with respect to your other outstanding debts, such as those junior mortgages referenced above, credit cards, medical bills and other debts.

As with any modification request and any mediation, the lender is not required to actually grant you a modification.  However, lenders participating in the MMM program are required to participate in good faith.

Any co-obligor and/or co-borrower is required to participate in the MMM process, even if he/she is not in bankruptcy.

At this time, only individual debtors can participate in the MMM program.

Not exactly.  Once the MMM process begins, any pending motion for relief from stay shall be continued until such time as the MMM has been concluded.  The pendency of the MMM constitutes "good cause" and "compelling circumstances" to delay the entry of any final decision on a pending request for relief from the automatic stay.  Furthermore, any lender seeking relief from the automatic stay prior to the conclusion of the MMM must file a motion requesting a hearing, setting forth the reasons why relief must be considered prior to conclusion of the MMM.

No.  The referral of a matter to MMM does not relieve the debtor from any other court orders or applicable provisions of the Bankruptcy Code.  The case itself shall not be stayed or delayed without further order from the Bankruptcy Court.  However, if a debtor's case is otherwise in a posture for administrative closing, the case shall remain open during the pendency of MMM, unless otherwise ordered by the Bankruptcy Court.

The MMM program can be used as a tool to negotiate the surrender of real property that you do not want to retain, including a possible short sale or deed-in-lieu of foreclosure.

Yes.  In Chapter 13, an individual seeking to modify a mortgage must pay a monthly adequate protection payment during the pendency of the MMM process.  If an agreement is reached, these payments usually function to pay down the principal on the modified loan.

Yes.  One of the benefits of the MMM procedure is transparency and accountability.  If your modification is denied, the lender must explain what factors were taken into consideration in coming to that determination.  Sometimes, this leads to additional discussion and a chance to re-submit certain information that may result in a different decision by the lender.

Certain other judicial districts around the country are now implementing their own mortgage modification mediation procedures.  In Florida, all three districts (the Southern, Middle and Northern Districts) have now implemented a uniform MMM program.  The MMM program in Florida is widely recognized as among the leaders in the nation.  In fact, Florida is the first state to have mandatory mediation programs across the state.

In the Middle and Southern Districts of Florida, the success rate of debtors receiving a mortgage modification through mediation has averaged over 70%.

We most certainly can!  Our firm has successfully guided numerous clients through the MMM program, and we have achieved great results for our clients.  Whether it is Chapter 7, 11 or 13, we can assist individual debtors through the bankruptcy and MMM process.  If you are an attorney and have a client or potential client that is interested in the MMM program, we will take great care of your potential referral, making you look good in the process.  If you have additional questions about the MMM program, contact us for a no-cost consultation.

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Zach Shelomith is going to be a panelist at the American Bankruptcy Institute's 2015 Caribbean Insolvency Symposium (http://www.abiworld.org/CIS15/), which is being held at the Westin Grand Cayman in Grand Cayman, Cayman Islands between February 5, 2015 and February 7, 2015.

He is the only panelist from the State of Florida who will be speaking at the session about individual Chapter 11 bankruptcy.  The moderator at that session will be Judge A. Jay Cristol, Chief Emeritus of the U.S. Bankruptcy Court for the Southern District of Florida.

We previously mentioned that Jonathan Leiderman volunteers as a Big Brother for Big Brothers Big Sisters of Broward County, an organization that, for more than 100 years, has operated under the belief that inherent in every child is the ability to succeed and thrive in life.

The organization makes meaningful, monitored matches between adult volunteers ("Bigs") and children ("Littles"), ages 6 through 18, and develops relationships that have a lasting effect on the lives of young people. 

We wanted to congratulate Jonathan for celebrating the 5th year anniversary of the date he was matched with his Little Brother, John, who was 9 at the time they met.