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Mortgage Foreclosure Alternative

 

For the last few years the local Bankruptcy Court has had a program in effect which has provided individuals in bankruptcy with a procedure to restructure their mortgage and keep their home. Whenever a principal residence is at risk of foreclosure, the Loss Mitigation Program seeks to have lender and debtor reach a consensual resolution which could allow debtor to stay in the home, resume mortgage payments, and deem the mortgage current. Once a bankruptcy case is filed, either debtor or lender may file a Loss Mitigation Request. If filed by

 

Once a bankruptcy case is filed, either debtor or lender may file a Loss Mitigation Request. If filed by debtor, the lender has 14 days to file an Objection to Loss Mitigation. If no Objection is filed, the Bankruptcy Court will issue an Order Granting Loss Mitigation which will include certain deadlines by which debtor has to provide various types of financial information including tax returns and paystubs, and the scheduling of a Status Conference.

 

There are numerous benefits to choosing Loss Mitigation through bankruptcy. The costs to debtor and the lender are usually much less than a mortgage foreclosure action, the success rate is relatively high, debtors often get to remain in the residence.