Local Rule RULE 6004–3: Mortgage Loan Modification by Chapter 13 Debtor

RULE 6004–3 Mortgage Loan Modification by Chapter 13 Debtor

(a) Mortgage Modification Program. The Mortgage Modification Program ("MMP") is hereby adopted and shall be implemented by the Mortgage Modification Program Procedures ("MMP Procedures") attached hereto as Appendix E and Forms MMP–01 through MMP–12 that will be posted on the Court's website. The MMP is available for all qualified open and active individual/joint chapter 11, 12, and 13 debtors. The compensation and costs allowed for participants in the MMP shall be set forth in the MMP Procedures and may be amended from time to time as provided in Local Bankruptcy Rule 2016–5(A)(2). In accordance with the MMP Procedures, any attorney's fees or costs required to be paid by the debtor(s) for participation in the MMP shall be paid by the chapter 12 or 13 trustee pursuant to the treatment set forth in a confirmed chapter 12 or 13 plan. Notwithstanding the foregoing, participation in the MMP shall be voluntary by both chapter 11, 12, or 13 debtors and creditors. Chapter 11, 12, or 13 debtors may seek to modify their mortgage outside of the MMP, as set forth in subsection (b) of this Local Bankruptcy Rule.

(b) Non-MMP Mortgage Modification. A party electing not to proceed in the MMP shall follow the rules as set forth in this subsection. Unless provided in a Consent Order resolving a Motion for Relief from Stay, a debtor must seek Court approval of a loan modification relating to a mortgage (which includes a deed of trust) on real property to be made prior to completion of plan payments (a "Non-MMP Motion").

(1) Notice. A party filing a Non-MMP Motion shall provide the chapter 13 trustee and any creditor who has filed a request for all notices in the case at least twenty-one (21) days' notice of the Non-MMP Motion unless the notice period has been shortened or enlarged by the Court for cause shown.

(2) Contents of Motion or Notice. The Non-MMP Motion shall be accompanied by a notice of opportunity to object and/or hearing (the "Non-MMP Notice") and a copy of a partially executed or fully executed modification agreement. If a copy of the Non-MMP Motion is not served with the Non-MMP Notice, then the Non-MMP Notice shall contain the following terms in addition to the requirements of Local Bankruptcy Rule 9013–1(c): (i) all terms of the modification including the term, principal, interest rate, and any future payment changes or balloon payments that will occur during the term of the chapter 13 plan; (ii) the current mortgage payment and the new payment after the loan modification; (iii) if the modification results in a higher monthly payment, the source of the funds to be used to make that payment; and (iv) if the modification results in a lower monthly payment, whether the debtor intends to increase the amount of his plan payments.

(3) If an opposition is not timely filed, the Court, in its discretion, may enter an order conditionally approving a Non-MMP Motion if only a partially executed agreement is filed, or finally approving a Non-MMP Motion if a fully executed agreement is filed.

(4) An additional no-look attorney's fee is not authorized for Non-MMP efforts unless an application is filed under Local Bankruptcy Rule 2016–2(A)(4)(i).