What is the loss mitigation program?

If people are afraid they may lose their property due to financial difficulties, they may be able to get help. This can be a difficult time for families as they may be unsure of where they can reside. Shelter is necessary for people to stay safe and healthy, especially for children. Instead of accepting defeat, these people can receive aid. The Loss Mitigation Program is a tool these individuals can use to reach a resolution to their issue. 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.

 

Who is qualified for 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. This is only allowed if they possess real property or a cooperative apartment that is used as a main residence. 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 process 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.