MORTGAGE MODIFICATION PROGRAM AVAILABLE IN ARIZONA CHAPTERs 7 and 13 CASES (THE FOLLOWING MAY BE OUT OF DATE – CHECK THE COURT’S WEBSITE)

Upside down houseMortgage Modification Mediation Program

Effective February 1, 2017 the United States Bankruptcy Court for the District of Arizona adopted uniform procedures and mandatory forms for its Mortgage Modification Mediation (MMM) Program (General Order 16-2). This program applies to Chapter 13 bankruptcy filings and all types of real property.

Designed to facilitate communications between debtors and mortgage lenders

The purpose of the program is to “function as a forum for individual debtors to explore mortgage modification options with their lenders for real property in which the debtor has an interest or is obligated on the promissory note or mortgage. The goal of the MMM Program is to facilitate communication and exchange of information in a confidential setting and encourage the parties to finalize a feasible and beneficial agreement under the supervision of the United States Bankruptcy Court for the District of Arizona”

The Bankruptcy  court will not force either the lender or borrower to participate in the program

The Bankruptcy Court will not force any modification and will make no adjudication except with the consent of both parties. Any signed agreement reached at mediation must be approved by the Bankruptcy Court before it is binding and enforceable.

ARIZONA MORTGAGE MODIFICATION MEDIATION PROGRAM IN CHAPTER 13 CASES

First, the bankruptcy debtor has option of requesting assignment to the MMM Program by a filing of a motion(MMM Form #2), and if such a request is made timely, the Bankruptcy Court will enter an order referring the lender and debtor to mediation (MMM Form #3).  Both the lenders and the borrowers/debtors must show “good cause” when participating in the MMM Program.

What this means is that lenders who have claims secured by real property should be prepared to mediate if the borrower/debtor files bankruptcy. The MMM does not require the lender to participate in the program.  If the lender participates it requires the lender to consider the debtor’s financial disclosures and what loss mitigation options might be available based on those financial disclosures. The benefit to the lender in the MMM program is that the debtor is required to provide financial information in advance of the mediation or run the risk of the mediation being cancelled.

What this means for debtors is a stop to the needless circle of producing the same documents time after time, with the lender’s ever changing staff saying they never received the documents and now have to start the process all over (with the requirements of yet another copy of the same documents).  Why does this stop?  Because all documents are filed through the Portal (only the parties can see the documents in the Portal).

For a complete copy of the MMM Procedures, click here.

A. Debtor –Debtor includes an individual debtor or both debtors in a joint petition.

B. Debtor’s Prepared Package – Debtor’s initial loan modification forms completed using the Document Preparation Software, and the supporting documentation required for submission to Lender for review through the MMM Portal.

C. Completed Package –Debtor’s Prepared Package along with any additional documents or information specified by Lender pursuant to Section IX(B)(1)(a) on the MMM Portal.

D. Estimated Monthly Payments – the lesser of (a) 31% of the Debtor’s gross monthly income less any amount paid towards HOA fees due for the property (exclusive of applicable Trustee’s fees) or (b) the regular monthly payment, or such other amount designated by the secured creditor for the property subject to the MMM Program.

E. Fee Application – Attorney for the Debtor may file an Application for Mortgage Modification Mediation Compensation and Reimbursement of Mortgage Modification Mediation Expenses (MMM Form 23)

F. Final report  – Within 7 days after the parties reach such an agreement the Mediator shall upload to the MMM Portal and file with the Court a Final Report of Mortgage Modification Mediation Program Mediator (the “Final Report”) (MMM Form 8).

G. Interim Report (Mediator’s) 1. Within 7 days after reaching the trial loan mod agreement the Mediator shall upload to the MMM Portal and file with the Court an Interim Report of Mortgage Modification Mediation Program Mediator (MMM Form 7).

H. Lender –Lender is the current beneficiary and payee of the promissory note secured by the deed of trust, and/or its mortgage servicing agent.

I. Registry of Mediators – The Clerk of the Court shall establish and maintain a registry of qualified individuals who have been approved by the Court to serve as Mediators for the MMM Program.

J. Required Parties – Required Parties include, when applicable, Debtor, Debtor’s attorney, Lender, Lender’s Arizona attorney, any co-obligor, co-borrower or third-party obligor, and the Mediator (also referred to as “parties” in these procedures).

K. “Successor Lender” – Lender transfers a loan subject to the MMM Program the new holder of the loan is referred to as the “Successor Lender”.

Eligible to participate in the MMM Program, Debtor must:
  1. Be an individual;
  2. Have a chapter 13 case currently pending;
  3. Have the ability to immediately pay the applicable Document Preparation Software fee ($40.00), the applicable MMM Portal submission fee ($40.00), and $300.00 (one half of the $600.00 Mediator’s fee) to the Mediator, and
  4. Have sufficient monthly disposable income to make a Chapter 13 Plan payment of not less than the Estimated Monthly Payment.
  5. The Debtor must pay the bankruptcy filing fee must be paid in full before filing a motion to participate in the MMM Program.
Case Dismissed, Converted or Removed from Arizona: If a Debtor’s Chapter 13 case is dismissed, converted, or otherwise removed from the District of Arizona prior to Debtor’s completion of the MMM Program, the MMM proceedings in the case will immediately terminate and the parties will be relieved of the requirements of these procedures.

Requirements for Debtor to Participate in MMM Program:
  1. Initial Loan Modification Forms: Debtor must prepared package of initial loan modification forms completed using the Document Preparation Software, and the supporting documentation required for submission to Lender for review through the MMM Portal.
  2. Completed Package–Debtor’s Prepared Package along with any additional documents or information specified by Lender pursuant to Section IX(B)(1)(a) on the MMM Portal.
  3. Estimated Monthly Payments–the lesser of (a) 31% of the Debtor’s gross monthly income less any amount paid towards HOA fees due for the property (exclusive of applicable Trustee’s fees) or (b) the regular monthly payment, or such other amount designated by the secured creditor for the property subject to the MMM Program.
  4. Debtor must actively participate in the program, provide documents when requested and pay the amount(s) agreed under the temporary or permanent loan agreements.

  1. The Motion for Referral must be filed within 90 days of the petition date or the effective date of the MMM Program. (VI)(A)(3)(a)
  2. The entire MMM Program proceedings shall be completed no later than 150 days after entry of the Order referring the case to the MMM Program, unless agreed to by the parties or ordered by the Court.
  3. The parties and Mediator are required to comply with all deadlines set forth in the Referral Order. Any deadlines imposed by the Referral Order may be extended by further order of the Court or by written agreement of the parties and Mediator on the MMM Portal.
  4. If the parties reach a trial loan modification agreement through the MMM Program, this deadline shall be extended for Debtor’s completion of trial period payments and the execution of a final loan modification.

The Court has mandated the use of a secure online portal (the “MMM Portal”), an online program that facilitates the preparation of the Debtor’s loan modification package (the “Document Preparation Software”), and local MMM forms (the “MMM Forms”) in an effort to expedite the exchange of information between Debtor and Lender.

A.  Portal Vendor – The MMM Portal vendor is managed and maintained by Default Mitigation Management, LLC (“DMM”).
  1. The MMM Portal can be accessed at www.dclmwp.com.
  2. The Document Preparation Software can be accessed through the MMM Portal or at www.documods.com.
B. Purpose – Submitting documents to the MMM Portal provides transparency in the mortgage modification process by making information immediately available to all parties through a secure internet website. The use of the Document Preparation Software further ensures that Debtor’s initial submission to Lender is complete and accurate, and should expedite the Lender’s review.
  1. The use of the MMM Portal and the Document Preparation Software is intended to eliminate the need for multiple submissions of documents that were not received and unnecessary delay based upon incomplete documentation.

All that parties (including the debtor and lender) must act in good faith or the court may enter sanctions.

Request for Referral to MMM–Debtor or Lender may seek referral to the MMM Program.

A. By Debtor:

  1. Debtor must:
    • Complete Debtor’s Prepared Package using the Document Preparation Software and
    • pay the $40.00 non-refundable fee directly to the vendor.
    • Verify Eligibility of Mediator before filing Motion for Referral
  2. File the Motion for Referral to Mortgage Modification Mediation Program (MMM Form 2) with the Court.
    • No later than 90 days after the petition date, effective date of MMM Program or after confirmation of a Chapter 13 Plan
    • If later than 90 days, must include a statement explaining why the MMM process was not commenced sooner.
    • Identify eligible Mediator
    • Motion for Relief: If the Motion for Referral is filed in response to a motion for relief from stay, the Lender shall be presumed to object and the Debtor must satisfy the additional notice and service requirements set forth in Section VI(A)(6)(b) (serve copy Referral Order on all required parties, mediator and Chapter 13 TE).
    • If Lender consents in writing Debtor must include Consent (MMM Form 5) with the Motion for Referral.
    • If Lender did not consent in writing Debtor must satisfy the additional notice and service requirements set forth in Section VI(A)(6)(b) (serve copy Referral Order on all required parties, mediator and Chapter 13 TE).
    • When filing the Motion for Referral, also lodge an Order On Motion for Referral to Mortgage Modification Mediation Program (the “Referral Order”) (MMM Form 3).
  3. Motion to Reconsider Deadline:
    • fourteen (14) day deadline for the non-moving party to seek reconsideration.
    • The moving party shall promptly schedule a hearing; and
    • All deadlines in the Referral Order suspended pending resolution of the Motion for Reconsideration.
  4. Notice and Service Requirements of Referral Order:
    • Lender provided written consent to entry:
      • Serve a copy of the Referral Order on all Required Parties, the assigned Mediator and Chapter 13 Trustee; and
      • File a Certificate of Service.
    • Lender DID NOT provide written consent to entry:
      • IMMEDIATELY Serve a copy of the Referral Order on all Required Parties, including the assigned Mediator and the Chapter 13 Trustee; and
      • File a Certificate of Service

B. By Lender–If Lender desires to commence MMM proceedings in a case, it shall follow the same steps required of Debtor under Sections VI (A)(2)-(5) of these procedures and use the same applicable forms, modified as appropriate.

  1. The entry of the Referral Order means the Mediator proposed in the Motion for Referral shall be assigned to the case, if no party objects.
  2. Objection to Proposed Mediator –
    1. Objection shall be made through the MMM Portal after the File Submitted Date (Section IX(A)(1)).
    2. The parties shall attempt to agree on a successor Mediator within fourteen (14) days after the File Submitted Date.
    3. If parties agree on Successor Mediator the objecting party shall
      • file a Stipulation Assigning Successor Mediator (MMM Form 16) and concurrently lodge with the Court an Order Approving Stipulation Assigning Successor Mediator (MMM Form 17).
      • Once such order is entered, Debtor shall promptly update the MMM Portal to identify the successor Mediator of the case.
    4. If parties Do Not Agree on Successor Mediator:
      • Within 14 days after the File Submitted Date, the objecting party must file with the Court an Objection to Selection of Mortgage Modification Mediation Program Mediator (MMM Form 4, as modified appropriately) (“Objection to Mediator”) and
      • Set the matter for hearing.
      • After notice and a hearing, the Court shall assign a Mediator.
      • Once a Mediator is assigned the Debtor shall promptly update the MMM Portal to identify the Mediator of the case.
  3. Failure to Timely Object – If the objecting party fails to timely file the Objection to Mediator and notice it for hearing, the Mediator identified in the Referral Order shall remain assigned to the case.
REQUEST REFERRAL TO MORTGAGE MODIFICATION MEDIATION PROGRAM

Debtor must prepare package of initial loan modification forms completed using the Document Preparation Software, and the supporting documentation required for submission to Lender for review through the MMM Portal.
E. Completed Package–Debtor’s Prepared Package along with any additional documents or information specified by Lender pursuant to Section IX(B)(1)(a) on the MMM Portal.
F. Estimated Monthly Payments–the lesser of (a) 31% of the Debtor’s gross monthly income less any amount paid towards HOA fees due for the property (exclusive of applicable Trustee’s fees) or (b) the regular monthly payment, or such other amount designated by the secured creditor for the property subject to the MMM Program.

1) The Motion for Referral must be filed within 90 days of the petition date or the effective date of the MMM Program. (VI(A)(3)(a))
2) The entire MMM Program proceedings in a case shall be completed no later than 150 days after entry of the Order referring the case to the MMM Program, unless agreed to by the parties or ordered by the Court.
3) The parties and Mediator are required to comply with all deadlines set forth in the Referral Order. Any deadlines imposed by the Referral Order may be extended by further order of the Court or by written agreement of the parties and Mediator on the MMM Portal.
4) If the parties reach a trial loan modification agreement through the MMM Program, this deadline shall be extended for Debtor’s completion of trial period payments and the execution of a final loan modification.

Debtors Eligible to Participate
A.Eligible to participate in the MMM Program, Debtor must:
  1. Be an individual;
  2. Have a chapter 13 case currently pending;
  3. Have the ability to immediately pay the applicable Document Preparation Software fee ($40.00), the applicable MMM Portal submission fee ($40.00), and $300.00 (one half of the $600.00 Mediator’s fee) to the Mediator, and
  4. Have sufficient monthly disposable income to make a Chapter 13 Plan payment of not less than the Estimated Monthly Payment.
B. The bankruptcy filing fee must be paid in full before a Debtor can file a motion to participate in the MMM Program.
C. If a Debtor’s Chapter 13 case is dismissed, converted, or otherwise removed from the District of Arizona prior to Debtor’s completion of the MMM Program, the MMM proceedings in the case will immediately terminate and the parties will be relieved of the requirements of these procedures.

Request for Referral to MMM–Debtor or Lender may seek referral to the MMM Program.

A. By Debtor:

  1. Debtor must:
    • Complete Debtor’s Prepared Package using the Document Preparation Software and
    • pay the $40.00 non-refundable fee directly to the vendor.
    • Verify Eligibility of Mediator before filing Motion for Referral
  2. File the Motion for Referral to Mortgage Modification Mediation Program (MMM Form 2) with the Court.
    • No later than 90 days after the petition date, effective date of MMM Program or after confirmation of a Chapter 13 Plan
    • If later than 90 days, must include a statement explaining why the MMM process was not commenced sooner.
    • Identify eligible Mediator
    • If the Motion for Referral is filed in response to a motion for relief from stay, the Lender shall be presumed to object and the Debtor must satisfy the additional notice and service requirements set forth in Section VI(A)(6)(b) (serve copy Referral Order on all required parties, mediator and Chapter 13 TE).
    • If Lender consents in writing Debtor must include Consent (MMM Form 5) with the Motion for Referral.
    • If Lender did not consent in writing Debtor must satisfy the additional notice and service requirements set forth in Section VI(A)(6)(b) (serve copy Referral Order on all required parties, mediator and Chapter 13 TE).
    • When filing the Motion for Referral, also lodge an Order On Motion for Referral to Mortgage Modification Mediation Program (the “Referral Order”) (MMM Form 3).
  3. Motion to Reconsider Deadline:
    • fourteen (14) day deadline for the non-moving party to seek reconsideration.
    • The moving party shall promptly schedule a hearing; and
    • All deadlines in the Referral Order suspended pending resolution of the Motion for Reconsideration.
  4. Notice and Service Requirements of Referral Order:
    • Lender provided written consent to entry:
      • Serve a copy of the Referral Order on all Required Parties, the assigned Mediator and Chapter 13 Trustee; and
      • File a Certificate of Service.
    • Lender DID NOT provide written consent to entry:
      • IMMEDIATELY Serve a copy of the Referral Order on all Required Parties, including the assigned Mediator and the Chapter 13 Trustee; and
      • File a Certificate of Service

B. By Lender–If Lender desires to commence MMM proceedings in a case, it shall follow the same steps required of Debtor under Sections VI (A)(2)-(5) of these procedures and use the same applicable forms, modified as appropriate.

REQUIRMENTS FOLLOWING ENTRY OF REFERRAL ORDER

A. Debtor’s Requirements Following Entry of Referral Order
Within 7 days after entry of the Referral Order or Lender’s registration on the MMM Portal, whichever is last, Debtor shall:
  1. Pay the non-refundable MMM Portal fee of $40.00 directly to the MMM Portal vendor; and
  2. Upload to the MMM Portal:
    • A copy of the Referral Order;
    • Debtor’s Completed Package; and
    • Identify the assigned Mediator on the MMM Portal.
  3. The “File Submitted Date” is the date the Portal fee is paid and the Debtor uploads the required documents.
Payment of Mediator’s fee: Within 7 days after Debtor identifies Mediator on MMM Portal the Mediator shall send contact information and payment instructions to Debtor and Lender.  Within 7 days after that Debtor shall pay $300.00 (one-half of the $600.00 Mediator’s fee) directly to the assigned Mediator.
Additional document request: Once Lender receives Debtor’s Completed Package Lender shall have 60 days to request additional information in order to complete Lender’s review of mortgage options.  Debtor shall provide the documents or information to Lender on the MMM Portal within 14 days after receiving such request.
B. Lender Requirements Following Entry of Referral Order:
Register on the MMM Portal – Lender and Lender’s Arizona counsel (if any) shall register within 14 days of Order, unless already registered.
  1. As part of the registration Lender shall provide to the MMM Portal vendor all applicable initial mortgage modification requirements, including any additional documents and information necessary to perfect Debtor’s Completed Package.
    • In the event Lender is already registered at the time the Referral Order is uploaded to the MMM Portal, Lender shall be responsible for providing any updates or additional documents to the MMM Portal vendor.
  2. Lender shall provide the MMM Portal vendor a list of Lender’s mortgage modification requirements and any additional documents necessary to perfect Debtor’s Completed Package shall be posted on the MMM Portal by the Portal vendor.

Payment of Mediator’s fee: Within 7 days after Debtor identifies Mediator on MMM Portal the Mediator shall send contact information and payment instructions to Debtor and Lender.  Within 7 days after that Lender shall pay $300.00 (one-half of the $600.00 Mediator’s fee) directly to the assigned Mediator.

Completed Package: Within 7 days after Debtor submits the Completed Package on the MMM Portal, Lender shall on the MMM Portal:
  1. Acknowledge receipt of the Completed Package; and
  2. Designate its single point of contact and Arizona legal counsel (if any).
    • Lender’s designated single point of contact and Arizona legal counsel shall have all requisite authority (within the investor’s guidelines) to settle any and all issues that may arise during the MMM conferences, and will attend and continuously participate in all MMM conferences in the case.
Debtor’s Completed Package: After receiving Debtor’s Completed Package (Section IX(A)(b)(ii)) Lender shall have  60 days to determine whether any additional documents or information is required to complete Lender’s review of Debtor’s mortgage modification options.
  1. Any request for additional documents or information must be made by Lender through the MMM Portal.
  2. If no request for additional documents or information is made by Lender within 60 days, Debtor’s Completed Package shall be deemed complete.
Lender’s Review and Decision:
  1. Lender shall timely review and underwrite the loan modification request, and
  2. indicate on the MMM Portal that it has completed a review of Debtor’s Completed Package.
  3. Lender shall indicate its final decision on the MMM Portal.
Transfer of Loan: Lender transfers a loan subject to the MMM Program, Lender or Debtor shall promptly update the MMM Portal to identify the new holder of the loan (the “Successor Lender”).
The Successor Lender shall:
  1. Be obligated to comply with all terms of the Referral Order;and
  2. Within 21 days of the transfer, acknowledge that it is the new holder of the loan on the MMM Portal and communicate to Debtor and the Mediator on the MMM Portal whether any additional documents or information are necessary to perfect Debtor’s Completed Package pursuant to Section IX(B)(5) of these procedures.
C. Mediator Requirements Following Entry of Referral Order
Within 7 days after Debtor identifies the assigned Mediator on the MMM Portal, the Mediator shall:
  1. Log into the MMM Portal and confirm their assignment as the Mediator in the case; and
  2. Provide the parties with contact information and instructions regarding payment of the Mediator fee.
Initial MMM Conference: The Mediator shall hold the initial MMM conference within 90 days after entry of the Referral Order. The initial MMM conference may be scheduled as soon as the Mediator determines that Lender has completed its review of Debtor’s Completed Package as required by Section IX(B)(5) of these procedures.
  1. The Mediator may communicate with the parties in whichever manner the parties and Mediator agree.
  2. After consultation with the parties, the Mediator shall fix a reasonable time and place for the MMM conferences.
  3. The Mediator shall give the parties at least 7 days notice on the MMM Portal of the date, time, and place for the MMM conferences.
  4. The Mediator shall report the scheduling of any and all MMM conferences through the MMM Portal.

Lender Requirements Following Entry of Referral Order:
Register on the MMM Portal – Lender and Lender’s Arizona counsel (if any) shall register within 14 days of Order, unless already registered.
  1. As part of the registration Lender shall provide to the MMM Portal vendor all applicable initial mortgage modification requirements, including any additional documents and information necessary to perfect Debtor’s Completed Package.
    • In the event Lender is already registered at the time the Referral Order is uploaded to the MMM Portal, Lender shall be responsible for providing any updates or additional documents to the MMM Portal vendor.
  2. Lender shall provide the MMM Portal vendor a list of Lender’s mortgage modification requirements and any additional documents necessary to perfect Debtor’s Completed Package shall be posted on the MMM Portal by the Portal vendor.

Payment of Mediator’s fee: Within 7 days after Debtor identifies Mediator on MMM Portal the Mediator shall send contact information and payment instructions to Debtor and Lender.  Within 7 days after that Lender shall pay $300.00 (one-half of the $600.00 Mediator’s fee) directly to the assigned Mediator.

Completed Package: Within 7 days after Debtor submits the Completed Package on the MMM Portal, Lender shall on the MMM Portal:
  1. Acknowledge receipt of the Completed Package; and
  2. Designate its single point of contact and Arizona legal counsel (if any).
    • Lender’s designated single point of contact and Arizona legal counsel shall have all requisite authority (within the investor’s guidelines) to settle any and all issues that may arise during the MMM conferences, and will attend and continuously participate in all MMM conferences in the case.
Debtor’s Completed Package: After receiving Debtor’s Completed Package (Section IX(A)(b)(ii)) Lender shall have  60 days to determine whether any additional documents or information is required to complete Lender’s review of Debtor’s mortgage modification options.
  1. Any request for additional documents or information must be made by Lender through the MMM Portal.
  2. If no request for additional documents or information is made by Lender within 60 days, Debtor’s Completed Package shall be deemed complete.
Lender’s Review and Decision:
  1. Lender shall timely review and underwrite the loan modification request, and
  2. indicate on the MMM Portal that it has completed a review of Debtor’s Completed Package.
  3. Lender shall indicate its final decision on the MMM Portal.
Transfer of Loan: Lender transfers a loan subject to the MMM Program, Lender or Debtor shall promptly update the MMM Portal to identify the new holder of the loan (the “Successor Lender”).
The Successor Lender shall:
  1. Be obligated to comply with all terms of the Referral Order;and
  2. Within 21 days of the transfer, acknowledge that it is the new holder of the loan on the MMM Portal and communicate to Debtor and the Mediator on the MMM Portal whether any additional documents or information are necessary to perfect Debtor’s Completed Package pursuant to Section IX(B)(5) of these procedures.

Mediator Requirements Following Entry of Referral Order
Within 7 days after Debtor identifies the assigned Mediator on the MMM Portal, the Mediator shall:
  1. Log into the MMM Portal and confirm their assignment as the Mediator in the case; and
  2. Provide the parties with contact information and instructions regarding payment of the Mediator fee.
Initial MMM Conference: The Mediator shall hold the initial MMM conference within 90 days after entry of the Referral Order. The initial MMM conference may be scheduled as soon as the Mediator determines that Lender has completed its review of Debtor’s Completed Package as required by Section IX(B)(5) of these procedures.
  1. The Mediator may communicate with the parties in whichever manner the parties and Mediator agree.
  2. After consultation with the parties, the Mediator shall fix a reasonable time and place for the MMM conferences.
  3. The Mediator shall give the parties at least 7 days notice on the MMM Portal of the date, time, and place for the MMM conferences.
  4. The Mediator shall report the scheduling of any and all MMM conferences through the MMM Portal.
MEDIATION CONFERENCES

The Required Parties are required to attend all MMM conferences and be authorized to settle all matters requested in the Motion for Referral.

Appearances – in person or telephonically:
A. Debtor:

  1. Represented: The Debtor may participate by telephone provided the Debtor is physically present with their attorney.
  2. Not Represented: A Debtor must be physically present at the location designated by the Mediator and provide identification at all conferences, except
    • The Debtor may appear telephonically (at the Mediator’s sole discretion) if the Mediator has a designated surrogate who can physically confirm the identification of the Debtor.
  3. Interpreter: Debtor shall provide an interpreter at Debtor’s own expense.

B. Lender – Lender’s designated representative and Lender’s attorney (if any) may appear telephonically.
C. Additional Parties – same requirements as above for Debtor.
D. Public Entities – shall appear (in person or telephonically) through a representative with full authority to negotiate on behalf of the entity and to recommend settlement to the appropriate decision-making body of the entity.

Mandatory Attendance of Parties – The Mediator may conduct MMM conferences in a manner which, in the Mediator’s sole discretion:

  1. best facilitates the goal of finalizing a feasible and beneficial agreement.
    • such as when the parties are to be present in the conference room, or
    • the Mediator may permit telephonic appearances if all the parties agree, with such calls initiated by the Mediator, which may include designation of a call-in number.

Initial and Final MMM Conferences:

Timing:

  1. The initial MMM conference:
    1. shall not exceed one (1) hour unless otherwise agreed by the parties and the Mediator.
    2. In the event the parties are unable to reach an agreement, the Mediator shall schedule a second and final MMM conference to be held within thirty (30) days after the conclusion of the initial MMM conference.
  2. The final MMM conference:
    1. shall not exceed one (1) hour unless otherwise agreed by the parties and the Mediator.
    2. If necessary, with consent of the parties, the Mediator may continue the conference beyond the two one-hour conferences.
  3. No party can be required to participate for more than a total of 2 hours, unless otherwise ordered by the Court.

Content of Initial and Final MMM Conferences –

  1. The MMM conferences should be used to explore mortgage modification options between the parties, and
  2. to discuss and resolve issues related to claims secured by the real property.
  3. Such issues shall include,
    • whether a final loan modification agreement recapitalizes pre-petition and/or post-petition arrears, and
    • whether Lender intends to assert any post-petition fees, expenses, or charges pursuant to FRBP 3002.1(c).
  4. Possible exit strategies: Nothing in these procedures shall preclude the parties from using the MMM Conference to pursue other exit strategies for the Debtor (such as a deed in lieu of foreclosure or a delayed move-out date).

Authority and Ability to Finalize Agreement

  1. Each party and their representatives shall appear with the full authority to negotiate the amount and issues in dispute without further consultation.
  2. All parties attending the conferences shall be ready, willing and able to sign a binding settlement agreement.
  3. At all MMM conferences the parties shall have the ability to scan, send and receive documents by email, facsimile as necessary to enter into a binding settlement agreement.

Confidential Communications:

  1. All communications and information exchanged during the MMM Program shall be privileged and confidential and shall be inadmissible in any subsequent proceeding (Rule 408 Fed. R. Evid).
  2. The Chapter 13 Trustee shall have complete access to the MMM Portal, but shall not be able to view the contents of any documentation or other confidential information exchanged by the parties.

No Agreement – If the parties fail to reach an agreement:

1. Mediator: within 7 days after the conclusion of the MMM conferences the Mediator shall upload to the MMM Portal and file with the Court the Final Report.

2. Debtor: within 28 days after the Mediator files the Final Report with the Court, Debtor shall file an Amended or Modified Chapter 13 Plan providing for appropriate treatment of Lender’s claim (i.e. curing pre-petition and post-petition arrears while maintaining conduit payments, or surrendering the property).

TRIAL & FINAL LOAN MODIFICATION

If the parties reach a trial loan modification agreement:

  1. Within 7 days after reaching the trial loan mod agreement the Mediator shall upload to the MMM Portal and file with the Court an Interim Report of Mortgage Modification Mediation Program Mediator (the “Interim Report”) (MMM Form 7).
  2. Within 7 days after the Mediator files the Interim Report with the Court:
    1. Debtor shall file a Motion to Approve Trial Loan Modification Agreement (MMM Form 9).
    2. Debtor shall lodge an Order Approving Trial Loan Modification Agreement (MMM Form 10).
      1. Once entered by the Court, Debtor shall serve a copy of such order on all Required Parties and the Chapter 13 Trustee, and file a certificate of service evidencing these parties were properly served.
  3. The Mediator and all Required Parties shall monitor the trial loan modification and manage the mediation until a final loan modification has been executed or Lender has denied a final loan modification.
  4. Access to the MMM Portal shall remain open during the pendency of a trial loan modification.

If the parties reach a final loan modification agreement:

  1. Final Report: within 7 days after the parties reach a final loan modification the Mediator shall upload to the MMM Portal and file with the Court a Final Report of Mortgage Modification Mediation Program Mediator (MMM Form 8).
  2. Within 14 days after the Mediator files the Final Report with the Court:
    • Debtor shall file a Motion to Approve Final Loan Modification Agreement (MMM Form 11) and lodge an Order Approving Final Loan Modification Agreement (MMM Form 13).
      • If Debtor is represented by an attorney, this Motion may be filed ex parte.
      • If Debtor is not represented by an attorney, this Motion must be noticed, served, and set for a hearing using a Notice of Hearing on Pro Se Debtor’s Motion to Approve Final Loan Modification Agreement (MMM Form 12).
  3. Once the Order Approving Final Loan Modification Agreement is entered by the Court the Debtor shall:
    • serve a copy of the Order Approving Final Loan Modification on all Required Parties and the Chapter 13 Trustee, and
    • file a certificate of service showing these parties were properly served.
  4. Within 28 days after entry of the Order Approving Final Loan Modification, Debtor shall:
    • file an Amended or Modified Chapter 13 Plan providing for conduit loan modification payments pursuant to Section III(A) of the procedures, if not already provided.
CHAPTER 13 PLAN – DEALING WITH THE LOAN MODIFICATION PROCESS

Referral to MMM Program Prior to Confirmation:

If Debtor seeks referral to the MMM Program prior to confirmation, Debtor shall file an initial or Amended Chapter 13 Plan in conjunction with the Motion for Referral. The Chapter 13 Plan shall:

  1. Provide for a plan payment of no less than the Estimated Monthly Payment.
  2. Identify the Lender participating in the MMM Program and omit any specific payment amount to the Lender.
  3. Indicate in Section (J) – “Varying Provisions” of the Chapter 13 Plan that:
    1. Debtor intends to participate in the MMM Program; and
    2. Trustee shall reserve all disbursements, including arrearage payments, to the participating Lender and to any creditors secured by the same real property during the pendency of the MMM Program, unless the Amended Plan or separate Court order provides otherwise.
  4. Propose treatment of other creditor claims consistent with the Bankruptcy Code.

Referral to MMM After Confirmation –

If Debtor seeks referral to the MMM Program after confirmation, Debtor shall file a Modified Chapter 13 Plan in conjunction with the Motion for Referral. The Modified Chapter 13 Plan shall:

  1. Provide for a plan payment of not less than the Estimated Monthly Payment.
  2. Identify the Lender participating in the MMM Program and omit any specific payment amount to the Lender, other than any amount already paid by the Chapter 13 Trustee.
  3. Indicate in Section (J) – “Varying Provisions” of the Modified Chapter 13 Plan that:
    1. Debtor intends to participate in the MMM Program;
    2. Trustee shall reserve all disbursements, including arrearage payments, to the participating Lender and to any creditors secured by the same real property during the pendency of the MMM Program, unless the Modified Plan or separate Court order provides otherwise; and
    3. Trustee shall continue to make all other disbursements pursuant to other orders of the Court, including a previous order confirming plan.

Trial Loan Modification

  1. If mediation results in a trial loan modification, Trustee shall make trial loan modification payments to Lender pursuant to the trial loan modification agreement until:
    • Further Order of the Court;
    • A final loan modification is documented, in which case Trustee will make payments according to the final loan modification; or
    • A final loan modification is denied by Lender.

Chapter 13 Plan

  1. Debtor shall file a Plan pursuant to Sections XIII(A)-(B).
  2. If Debtor fails to timely file an Amended or Modified Chapter 13 Plan in accordance with the procedures, the Lender and/or Chapter 13 Trustee may seek appropriate relief from the Court.

Disbursements by Trustee

  1. The Chapter 13 Trustee shall retain the Estimated Monthly Payments made pursuant to Sections XIII(A) and (B) of the procedures until:
    1. An Order Approving Attorney’s Fees for representation of the Debtor in the MMM Program is entered by the Court; and
    2. Debtor has filed with the Court a Chapter 13 Plan, Amended Chapter 13 Plan, or Modified Chapter 13 Plan proposing payments to Lender as set forth in the loan modification agreement; and
      1. The Court has entered an Order Approving Trial Loan Modification Agreement (MMM Form 10); or
      2. Debtor has filed a Motion to Approve Final Loan Modification Agreement (MMM Form 11).
    3. Timely Payments: Estimated Monthly Payments received timely by the Trustee pursuant to these procedures shall be deemed payments made timely pursuant to any trial loan modification agreement or final loan modification agreement under the MMM Program.
    4. THE PLAN SHALL CONTROL: Entry of an Order confirming the Chapter 13 Plan after the conclusion of the MMM Program shall suspend and revoke any remaining obligations of Trustee to make disbursements pursuant to an Order Approving Trial Loan Modification Agreement (MMM Form 10) or Order Approving Final Loan Modification Agreement (MMM Form 13).

Plan Confirmation

In cases where a trial and/or final modification has been reached, the Court will not confirm a proposed Chapter 13 Plan, Amended or Modified Chapter 13 Plan until after:

  1. The Court has entered an Order Approving Final Loan Modification Agreement (MMM Form 13); and
  2. The proposed Chapter 13 Plan, Amended or Modified Chapter 13 Plan accurately reflects the terms of the final loan modification agreement or otherwise satisfies the requirements 11 U.S.C. § 1325(a)(5) with respect to Lender’s claim.

Chapter 13 Trustee MMM Program Guidelines –

  1. Each Chapter 13 Standing Trustee may issue guidelines, consistent with these procedures, for the administration of cases involved in the MMM Program.
  2. The Chapter 13 Trustee guidelines appointed to the case must be observed.
  3. The Chapter 13 Trustees may revise the guidelines and shall reissue any revised guidelines with a notation of the effective date of the revision.
EFFECT OF MEDIATION

Automatic Stay:

  1. 362(a) Modified: Upon entry of the Referral Order, the automatic stay of § 362(a) is modified to the extent necessary to facilitate the MMM Program, unless otherwise ordered by the Court.
  2. Motions for Relief – stayed during MMM Program:
    1. After entry of the Referral Order all pending motions for relief from the automatic stay with respect to real property subject to the MMM Program shall be continued until the MMM Program is completed.
    2. The pendency of the MMM Program shall constitute good cause under § 362(e) to delay any final decision.
    3. Any party seeking relief from the automatic stay prior to the conclusion of the MMM Program shall, in a motion, set forth the reasons why relief is appropriate prior to the conclusion of the MMM Program.

No Delay – Referral of a case to the MMM Program does not stay or delay any proceedings in the bankruptcy case without further order of the Court.

Closing of the Case: If Debtor’s bankruptcy case is otherwise in a posture for administrative closing, the case shall remain open during the pendency of the MMM Program, unless otherwise ordered by the Court.

MEDIATOR PROCEDURES, COMPENSATION & RESPONSIBILITIES

Court Approval of Mediators:

  1. Mediator approval will be based upon the application and qualifications set forth in Section XV(B) of the procedures.
  2. Registration of Mediators – The Clerk of the Court shall maintain a Registry of Mediators.
    • Mediators shall be listed on the Registry of Mediators for 1 year
    • Mediators must reapply each year.
    • Following approval from the Court, Mediators must register directly on the MMM Portal so that Debtor may designate the Mediator and provide access to Debtor’s submissions on the MMM Portal.
    • The Clerk will provide viewing access to each approved Mediator’s completed application.
  3. Minimum Qualifications – In order to be eligible for consideration as a Mediator in the MMM Program, a mediator must:
    • Be a registered user on PACER and CM/ECF;
    • Have successfully completed at least six (6) hours of MMM training; and
    • Be either:
      • A licensed member, in good standing, of the State Bar of Arizona and admitted to practice law for at least five (5) years.
      • A retired Arizona state court or federal court judge;
      • An active panel trustee with at least five (5) years of service as a panel trustee in Arizona; or
      • A Mediator previously approved under MMM Procedures promulgated by a United States Bankruptcy Court in another district.
  4. Mediator Application –
    • File the Verification of Qualifications to Act as Mediator in the Mortgage Modification Mediation Program (the “Mediator Verification”) (MMM Form 1) with the Clerk of the Court
    • After the first year of the program, applications shall be filed no later than November 1st of the preceding calendar year.
  5. Mediator’s Oath – Every eligible applicant shall take the oath or affirmation prescribed by 28 U.S.C. § 453, before serving as a Mediator in the MMM Program.
  6. Standards of Professional Conduct – Shall be subject to the Model Standards of Conduct for Mediators.

Selection of Mediator – After verifying the Mediator is eligible to serve, the party moving for referral to the MMM Program shall identify the proposed Mediator in the Motion for Referral. The proposed Mediator will be assigned to the case unless an objection is made pursuant to Section VII of the procedures.

Responsibilities of Mediator – In addition to the duties identified throughout these procedures, the Mediator shall be responsible for performing the following services with respect to the MMM Program:

  1. Promptly acknowledge assignment as the Mediator on the MMM Portal and provide the parties with contact information and instructions regarding payment of the Mediator fee;
  2. Communicate with the parties primarily through the MMM Portal;
  3. Ensure the parties’ ongoing compliance with the requirements of these procedures;
  4. Verify Lender has received and reviewed Debtor’s Prepared Package;
  5. Ensure all necessary documentation is uploaded to the MMM Portal for Lender to complete an analysis of Debtor’s mortgage modification options;
  6. Report the scheduling of any and all MMM conferences on the MMM Portal;
  7. Schedule the initial MMM conference to take place within 90 days after entry of the Order referring the case to the MMM Program;
  8. If necessary, schedule the second MMM conference to take place within 30 days after the conclusion of the initial MMM conference;
  9. Participate in a maximum of 2 one-hour MMM conferences, unless otherwise agreed by the parties pursuant to Section XI(A) of the procedures;
  10. Facilitate communication and exchange of information on the MMM Portal and during all MMM conferences to encourage the parties to finalize a feasible and beneficial agreement;
  11. Facilitate the discussion and resolution of issues related to claims secured by the real property subject to the MMM Program, such as:
    • whether a final loan modification agreement recapitalizes pre-petition and/or post-petition arrears, and
    • whether Lender intends to assert any post-petition fees, expenses, or charges pursuant to FRBP 3002.1(c);
  12. Manage the mediation until a final loan modification has been executed or Lender has denied a final loan modification;
    • The Mediator shall maintain open MMM Portal access for all parties; and
    • Ensure Lender’s prompt action after Debtor’s completion of trial period payments;
  13. Timely file all Reports as required by Section XII of the procedures; and
  14. Request and appear at a status hearing in the event that 150 days passes without acceptance or denial of a loan modification (trial or final).

Compensation of Mediators – Mediators shall be compensated at the rate set by the U.S. Bankruptcy Court for the District of Arizona.

  1. The cost of the Mediator’s services shall be borne equally.
    • Unless otherwise agreed by the parties and the Mediator:
    • Debtor and Lender shall each pay $300.00 (one-half of the applicable $600.00 Mediator fee) directly to the Mediator within 7 days after the Mediator makes initial contact with the parties on the MMM Portal pursuant to Section IX(C)(1)(b) of the procedures.
      • After providing the parties with instructions regarding payment of the $600.00 Mediator’s fee, the Mediator is not required to perform any MMM conferences until paid.
    • Fees for MMM conferences beyond the initial 2 one-hour sessions shall be divided equally between the parties.
      • Payment shall be made by the parties prior to the beginning of each successive MMM conference.
      • If Debtor is not represented by an attorney, Debtor shall pay, by money order or cashier’s check, to the Mediator Debtor’s share of the one-hour session at least 24-hours before the MMM conference.
      • Any balance owed for a session extending beyond the pre-paid session shall be paid as soon as possible, or within 2 business days following conclusion of the final session.

Removal from Registry of Mediators

  1. By the Court: The Clerk shall remove a Mediator from the Registry of Mediators if the Court so.
  2. Voluntary Request of Mediator:
    • Shall provide the Clerk of the  Court a Request for Removal Program Registry of Mediators (MMM Form 14).
    • The Clerk of the Court shall promptly remove a Mediator from the Registry of Mediators.
    • Any Mediator voluntarily removed from may later reapply by filing a new Mediator Verification.
  3. New and existing cases:
    1. A Mediator removed from the Registry of Mediators shall not accept any new cases and shall immediately contact the MMM Portal vendor to discontinue access to the MMM Portal.
    2. Unless otherwise ordered by the Court, a removed Mediator may complete any pending mediations.

Mediator Resigns or is Unable to Serve – If a Mediator is unable to serve, the Mediator shall promptly file a Notice of Inability to Serve as Mediator (MMM Form 15) and serve on all Required Parties.

  1. Resignation of Mediator – In the event that a Mediator resigns, the parties shall attempt to agree on a successor Mediator.
    • If the Parties Agree on Successor Mediator – the party that requested referral to the MMM Program shall file Court a Stipulation Assigning Successor Mediator (MMM Form 16) and an Order Approving Stipulation (MMM Form 17).
      • Once the Order is entered, Debtor shall promptly update the MMM Portal to identify the successor Mediator.
    • If the Parties Do Not Agree on Successor Mediator – within 14 days after the Mediator’s resignation, the party that requested referral to the MMM Program shall file, notice, and serve a Motion for Selection of Successor Mediator (MMM Form 18).
      • The moving party must set a hearing on the Motion and serve a Notice of Hearing on Motion (MMM Form 19). After notice and a hearing, the Court shall select a successor Mediator.
      • Unless otherwise ordered, the moving party shall lodge with the Court an Order Approving Selection of Successor Mediator (MMM Form 20).
  2. Failure to file Stipulation/Order within 14 days  – If the party requesting referral to the MMM Program fails to file either a Stipulation and Order Assigning Successor Mediator (MMM Form 16 and MMM Form 17) or a Motion for Selection of Successor Mediator (MMM Form 18) within 14 days after the Mediator’s resignation, the Stipulation or Motion may be filed by another Required Party.
  3. Identifying Successor Mediator: Once a successor Mediator is assigned, Debtor shall promptly update the MMM Portal to identify the successor Mediator of the case.
  4. Fees: The resigning Mediator shall pay the Mediator fee to the successor Mediator within 7 days after the successor Mediator is assigned, assuming received funds or Court order otherwise.
RESPONSIBILITIES & COMPENSATION OF DEBTOR’S COUNSEL

MMM Program Responsibilities – If a Debtor seeks referral to the MMM Program, Debtor’s attorney shall be responsible for performing the following services with respect to the MMM Program:

  1. Determine Debtor’s eligibility to participate in the MMM Program;
  2. Use the Document Preparation System to complete Debtor’s Prepared Package;
  3. Prepare all forms required for submission on the MMM Portal;
  4. Submit all required documents and communications through the MMM Portal;
  5. Verify the proposed Mediators’ eligibility to serve;
  6. Prepare, file, and serve the Motion for Referral (MMM Form 2);
  7. Obtain and file a Lender’s Consent to Attend and Participate in Mortgage Modification Mediation Program (MMM Form 5) with the Motion for Referral, if applicable;
  8. Obtain and file a Third-Party Consent to Attend and Participate in Mortgage Modification Mediation Program (MMM Form 6) with the Motion for Referral, if applicable;
  9. Prepare and upload the Referral Order (MMM Form 3);
  10. Serve the Referral Order on all Required Parties, including the Mediator and the Chapter 13 Trustee, and satisfy the additional requirements of Section VI(A)(6)(b) of these procedures if applicable;
  11. File a Certificate of Service with the Court evidencing the parties were properly served with the Referral Order, as required under Section VI(A)(6)(b) if applicable;
  12. Ensure all Mediator fees due from the Debtor are timely paid to the Mediator;
  13. Communicate with Lender and the Mediator in an attempt to promptly settle or otherwise resolve all matters;
  14. Attend all MMM conferences;
  15. Prepare, file, and serve a Motion to Approve Trial Loan Modification Agreement (MMM Form 9) and upload an Order Approving Trial Loan Modification Agreement (MMM Form 10) (if a trial loan modification agreement is reached);
  16. Prepare, file, and serve a Motion to Approve Final Loan Modification Agreement (MMM Form 11 and MMM Form 12) and upload an Order Approving Final Loan Modification Agreement (MMM Form 13) (if a final loan modification agreement is reached);
  17. Review all modified loan documents;
  18. Prepare and file all other pleadings required herein to promptly settle the matter, if necessary; and
  19. Prepare any Motion and Notice of Hearing to be served upon all parties, and Order if approved by the Court, if necessary.

Fees:

  1. Attorney for Debtor may charge no more than $2,500.00 in attorney’s fees and $100.00 in costs, plus any advance MMM costs for participation in the MMM Program.
  2. Attorney for Debtor may file a Fee application (Application for Mortgage Modification Mediation Compensation and Reimbursement of Mortgage Modification Mediation Expenses (MMM Form 23):
    • which shall be supported by a Declaration certifying Section XVI(A) has been satisfied.
    • Debtor’s counsel shall simultaneously lodge a form of Order Approving Fee Application for (MMM Form 24) , to be paid MMM Program fees and costs through the Chapter 13 Trustee upon completion of the requirements set forth in subsections (a) and (b) below:
      • The sum of $1,250.00 shall be presumed to compensate Debtor’s attorney for initial services relating to the MMM Program (such as collecting and uploading documents to the MMM portal, drafting and filing the Motion for Referral, communicating with Lender and Mediator, and completing the services outlined in Section XVI(A)(1-14) of the procedures).
      • These fees shall become payable upon the Mediator’s scheduling of the initial MMM conference under Section IX(C)(2) of the procedures.
      • The remaining balance of $500.00 shall become payable upon completion of the services outlined in Section XVI(A)(15)-(19) of the procedures.
    • All fees shall be subject to the availability of funds held by the Chapter 13 Trustee less trustee fees and adequate protection payments due to creditors secured by personal property.
      • These fees will become payable in the ordinary course of Chapter 13 Trustee disbursements upon:
        • the Mediator scheduling the initial MMM conference under Section IX(C)(2) of the procedures;
        • entry of an Order approving the fee application; and
        • the attorney for the Debtor serving the Order approving the fee application on the Chapter 13 Trustee.

MORTGAGE MODIFICATION MEDIATION (MMM) PROGRAM PROCEDURES

MORTGAGE MODIFICATION MEDIATION FORMS

CM/ECF DOCKETING OF MORTGAGE MODIFICATION MEDIATION DOCUMENTS

GENERAL ORDER 16-2 ESTABLISHING THE MMM PROGRAM