Mortgage Modification in Bankruptcy — The subprime mortgage crisis in 2008 resulted in record numbers of residential loan defaults and foreclosure lawsuits being filed across the United States. In 2008 and 2009, Congress enacted laws implementing the Home Affordable Modification Program, also known as HAMP, a federal program set up to help eligible home owners with loan modifications of their home mortgage debt. The program was built as a collaboration with lenders, investors, securities, mortgage servicers, the FHA, the VA, FHLMC, FNMA, and the Federal Housing Finance Agency, to create standard loan modification guidelines for lenders to take into consideration when evaluating a borrower for potential loan modification.
In 2012, 49 state attorneys general and the federal government announced a historic joint federal-state settlement with the country’s five largest mortgage servicers. Under the settlement, the servicers are required to provide up to $17 billion in principal reduction and other forms of loan modification relief nationwide. The Orlando Division of the Middle District of Florida, United States Bankruptcy Court, became among the first courts in the nation, and a national leader, in implementing a residential mortgage modification mediation program in bankruptcy proceedings in an attempt to increase the number of residential loan modifications.
Effective August 15, 2014, the U. S. Bankruptcy Court for the Middle District of Florida adopted uniform district-wide mortgage modification mediation procedures, including the expansion of mortgage modification mediation to all cases for any type of real property.
Other bankruptcy courts throughout the state of Florida, as well as the nation, including the Jacksonville Division of the United States Bankruptcy Court of the Middle District of Florida, have followed suit by implementing residential mortgage modification mediation programs. On January 31, 2013, an Administrative Order Prescribing Procedures for Residential Mortgage Foreclosure Mediators Certification was entered by Judge Jennemann in the Orlando Divison of the U. S. Bankruptcy Court, Middle District of Florida. The order imposes certain eligibility and training requirements for mediators seeking approval as foreclosure mediators in bankruptcy court. The list is utilized throughout the Middle District of Florida, including the Jacksonville Division. Mr. McCorvey has met the eligibility requirements, completed the requisite training, and is listed as an approved Residential Mortgage Foreclosure Mediator for the Middle District of Florida.