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Ohio Courts Add Program to Expedite Settlement Process

The United States Bankruptcy Court for the Southern District of Ohio recently announced a Mortgage Modification Mediation Program (MMM Program) to facilitate negotiations and expedite the settlement process between debtors and creditors within the bankruptcy proceedings.

“The MMM Program shall be available for all open and active bankruptcy cases currently pending in the Southern District of Ohio as of October 1, 2020.i The program is available for “any mortgage, lien or extension of money or credit secured by [any property in which the Debtor holds an interest].”

The MMM Program is similar to the program initiated in Florida in 2014 which proved to be very effective. The program is optional and does not prevent direct negotiations between the debtor and creditor outside of the program. Necessary forms for requesting and participating in the mediation program can be found on the Court’s website.

The debtor must motion the bankruptcy court for mediation and once mediation is ordered, there are set deadlines for both the debtor and creditor to provide necessary documents, information and reports. Both the debtor and creditor must register on the online portal (a one-time event for creditors) which provides a platform for submission and review of documents and other information necessary for the loan modification process.

The MMM period lasts 150 days from the entry of the order directing mediation but allows for extensions if needed. Participation in the MMM Program does not “relieve the parties from complying with any other Court orders or applicable provisions of the United States Bankruptcy Code” and the debtor must make “adequate protection payments” for the benefit of the creditor during the MMM period. The program requires each of the participating parties “act in good faith” or be subject to sanctions or dismissal from the MMM program.

i All of the information in this article comes from the United States Bankruptcy Court Southern District of Ohio’s website: ohsb.uscourts.gov. Most of the information came from the document titled: “Mortgage Modification Mediation Program and Procedures” available on the same site.

About Author: Roy Diaz

Roy A. Diaz is the Managing Shareholder of Diaz, Anselmo Lindberg, P.A. The firm provides representation in Florida, Illinois, Ohio, Indiana, Kentucky, Wisconsin and Michigan. Diaz has been a member of the Florida Bar since 1988. He has concentrated his practice in the areas of real estate, litigation, and bankruptcy. He has represented lenders, servicers of both conventional and GSE loans, private investors, and real estate developers throughout his career with an emphasis on the mortgage servicing industry for over 25 years.

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