The process is generally intended to allow debtors an opportunity to modify their residential first mortgage loans. The court does not possess the power to require the mortgage company to enter into a loan modification. Although, the mortgage company applies the same criteria in determining whether to enter into a loan modification, as they would, without the bankruptcy filing, the court’s Loss Mitigation Program considerably expedites the modification process.
The court encourages the debtors and mortgage representatives to use an internet portal that facilitates and controls the flow of documents between the parties. All communication and document exchange is documented. Therefore, the mortgage company cannot use their typical excuse that certain documents were not received.
The court requires the filing of certain documents, throughout the process, to guide and control the negotiations. Also, the company that owns the internet portal can assist the attorney and debtor with document gathering and the flow of information and documents between the parties.
Please note that in addition to applying for the loss mitigation program, a bankruptcy debtor will reap the benefits and protections of the bankruptcy laws. Also, if the debtor is unable to modify their loan, the debtor may still be able to save his house from foreclosure, if he can cure all mortgage arrears through a chapter 13 case, in addition to making their regular monthly mortgage payments.
Please call New Jersey bankruptcy law attorney Robert Manchel at (866) 503-5655 to discuss your bankruptcy questions.