Through loss mitigation, individuals may be able to reach a solution to avoid losing their property to foreclosure. The Loss Mitigation Program is a tool these individuals can use to reach a solution that best fits their situation. Loss mitigation may be able to save your home and it may also help to eliminate increased costs that the debtors may have to pay to lenders. For this process to work, loan modification, loan refinance, forbearance, short sale and surrender of property in full satisfaction may become a part of the deal that debtors can agree to. A combination of a few of these options can also be a way to resolve your current situation.
The Loss Mitigation Program is designed to provide a platform where debtors and lenders can reach an agreement to resolve the issue of foreclosure on a debtor’s residential property. Through this program, property owners have the opportunity to save their investment. The program aims to continue open communication between debtors and lenders to work toward a common goal. It encourages these individuals to meet and work together to reach an outcome that can satisfy both parties while being deemed fair. During this process, the Bankruptcy Court supervises the exchanges that occur between parties and assists when they can, acting as a mediator.
What are the requirements to join this program?
Individuals or joint debtors that are filing for Chapter 7, 11, 12 or 13 bankruptcy are eligible to participate in the Loss Mitigation Program to work toward a resolution. This are only able to join the program if they possess real property or a cooperative apartment that is used as a main residence. Before the process begins, loss mitigation parties should speak about the time and method for conducting the loss mitigation sessions. Furthermore, they should mention the types of loss mitigation solutions that are under the consideration of each party. The parties involved should also create a plan for the exchange of the required information prior to the loss mitigation session. This information can include the due date for the debtor to complete and return any information request or loss mitigation paperwork that each creditor may require.
During this process, a loss mitigation party is allowed to request a settlement conference or status conference with the Bankruptcy Court at any time. They can also ask for an extension of the loss mitigation period. If a party does not consent to this request, the Bankruptcy Court may schedule a hearing to consider if more sessions will reach a successful conclusion.
Loss mitigation parties are required to provide the Bankruptcy Court with updates on the procedure. This is to ensure that proceedings are occurring in a timely manner. The parties involved in the process must seek the Bankruptcy Court’s approval for any resolution that they came up with during the loss mitigation process.
If you require the services of an experienced Business Law or Bankruptcy attorney, contact the Law Offices of Allen A. Kolber, Esq. today to schedule a consultation and discuss your options.