Local Rule 3015-6: CONDUIT MORTGAGE PAYMENT PLANS IN CHAPTER 13
Bankr. D. Vt. — General rule
RULE 3015-6. CONDUIT MORTGAGE PAYMENT PLANS IN CHAPTER 13.
(a) Definitions. For purposes of this Rule, the following terms have the stated meanings:
(1) A "Conduit Mortgage Payment" is the Regular Monthly Mortgage Payment the debtor is obligated to pay to the mortgage creditor post-petition (as defined below), which the trustee disburses pursuant to the terms of this Rule.
(2) A "Conduit Mortgage Payment Plan" is a plan which states in Part 3.1 of Official Form 113 that the trustee will make ongoing monthly mortgage payments on one or more mortgages.
(3) The debtor is "Delinquent" when the debtor owes the Mortgage Creditor any past due payments or other charges as of the Filing Date. This term does not include a failure to make Regular Monthly Mortgage Payments that could have been – and were – timely paid after the Filing Date.
(4) The "Filing Date" is the date the case was commenced under chapter 13 or the date of conversion to chapter 13.
(5) A "Mortgage Creditor" is an entity entitled to enforce an allowed claim secured by a properly perfected mortgage on the debtor's principal residence, or the servicer for that entity, as determined by which entity files a proof of claim for the mortgage debt. Whenever this Rule refers to notice on the Mortgage Creditor, or requires the Mortgage Creditor to file a document, those references also include the Mortgage Creditor's attorney.
(6) The "Post-Petition Mortgage Arrearage" is the sum of past due Regular Monthly Mortgage Payments the debtor owes to a Mortgage Creditor that first came due after the Filing Date.
(7) The "Pre-Petition Mortgage Arrearage" is the sum of regular monthly mortgage payments the debtor owes to a Mortgage Creditor that could last be timely paid prior to the Filing Date.
(8) A "Regular Monthly Mortgage Payment" is
(A) the sum of the principal, interest, taxes, insurance, administrative fees, and any other charges properly escrowed, charged, or assessed under a promissory note, and secured by a properly perfected mortgage on the debtor's principal residence, that is due each month; or
(B) a monthly amount of no less than the sum of the taxes, insurance, administrative fees, and anticipated interest and principal, that is proposed in conjunction with the debtor's participation in this Court's mortgage mediation program, provided that any plan proposing to use a regular monthly mortgage payment, defined under this Rule, may only be confirmed by the Court if:
(i) after notice and opportunity to object, the Mortgage Creditor does not object, and
(ii) the debtor's plan provides that the debtor will promptly modify this figure to match the outcome of mortgage mediation if the mediation yields a different regular monthly mortgage payment.
(9) A "Waiver Order" waives the requirement for a debtor to make Conduit Mortgage Payments and will only be granted upon a showing of cause based upon exigent circumstances.
(b) Post-Petition Mortgage Payments.
(1) When the Debtor is Not Delinquent. A debtor who is not Delinquent is not required to make Conduit Mortgage Payments but may elect to do so.
(2) When the Debtor is Delinquent. A debtor who is Delinquent is required to make Conduit Mortgage Payments unless the debtor obtains a Waiver Order.
(c) Duties of the Debtor. In Conduit Mortgage Payment cases, the debtor must:
(1) file a wage withholding authorization, Local Form Y-8, within 14 days of the Filing Date, unless the Court grants the debtor's motion for waiver of the wage withholding requirement;
(2) promptly modify the amount of plan payments to comport with changes in the Regular Monthly Mortgage Payment;
(3) promptly object to the Mortgage Creditor's proof of claim if the debtor has cause to believe the amounts or computations on the proof of claim are inaccurate; and
(4) immediately file, and serve on the trustee, a copy of the acceptance of a trial payment plan ("TPP") so the trustee has the information necessary to disburse Conduit Mortgage Payments in a manner consistent with the terms of the TPP.
(d) Duties of the Trustee. In Conduit Mortgage Payment cases, the trustee must:
(1) disburse payments to the Mortgage Creditor within 30 days of the date the Mortgage Creditor files a proof of claim (and not disburse any payments if the Mortgage Creditor has not filed a proof of claim), unless the Court orders otherwise;
(2) promptly adjust the amount of the plan payment when the Regular Monthly Mortgage Payment increases, either on stipulation between the trustee and the debtor or pursuant to a Court order;
(3) disburse only full payments to the Mortgage Creditor and immediately notify (by e-mail) the debtor, the debtor's attorney (if any), and the Mortgage Creditor when there are insufficient funds to make full and timely payment;
(4) include a statement on the voucher of each payment the trustee sends to a Mortgage Creditor that specifies:
(A) the debtor's name, the case number, and the last four digits of the Mortgage Creditor's account number; and
(B) the amount allocable to the Conduit Mortgage Payment and the amount allocable to the Pre-Petition Mortgage Arrearage;
(5) file and serve upon all parties in interest, within 14 days of the debtor's first instance of plan payment default, a notice of delinquency (specifying the due date, number of missed payments, and the amount needed to cure the plan payment default); and
(6) file and serve upon all parties in interest a motion to dismiss the case if (A) the debtor does not cure the plan payment default or file a motion to modify the plan within 30 days of the trustee's notice of delinquency, (B) the debtor defaults on plan payments again, or (C) the trustee determines other grounds warrant dismissal of the case.
(e) Duties of the Mortgage Creditor. In Conduit Mortgage Payment cases, the Mortgage Creditor must:
(1) apply each Conduit Mortgage Payment disbursed by the trustee to the earliest outstanding post-petition payment due under the plan, as specified on the voucher narrative accompanying the payment;
(2) forbear from assessing a late fee unless the tardiness of the payment was caused by the debtor's failure to make a full or timely plan payment to the trustee;
(3) upon request, promptly provide an annual payment history to the trustee or debtor; and
(4) upon request, promptly provide to the trustee or debtor copies of all documents it has sent, and sends, to the debtor post-petition, including correspondence, statements, payment coupons, escrow notices, default notices, and any other documents, which disclose changes in (A) the name or identity of the Mortgage Creditor, (B) the monthly payment amount, (C) the interest rate or escrow requirements, or (D) the address to which mortgage payments are to be sent.
(f) Jurisdiction. This Court retains jurisdiction over all orders entered pursuant to this Rule.