CHAPTER 13 MORTGAGE MODIFICATION MEDIATION PROGRAM in the Western District (MMMWD)
The Chapter 13 Mortgage Modification Mediation Program in the Western District (MMMWD) is a program in the U.S. Bankruptcy Court for the Western District of Wisconsin to help qualified Chapter 13 debtors keep their homes. MMMWD is designed for Chapter 13 debtors who cannot afford their current mortgage payment, but have steady income to pay a modified mortgage payment. MMMWD sets up an informal meeting between the debtor and the lender conducted by a neutral mediator who acts as a discussion facilitator. The mediator cannot force a lender to modify a mortgage, but can help the debtor and the lender reach an agreement. MMMWD is a way for the debtor and lender to discuss whether modifying the mortgage is possible.
MMMWD is a voluntary program, and MMMWD has the support of the Bankruptcy Court. The Judges encourage qualified Chapter 13 debtors and lenders to try the program. MMMWD has been designed with protections for debtors and lenders alike.
As a service, the Wisconsin Foreclosure Mediation Network has assumed the role of administrator of the Program. In this capacity, they will manage the mediator roster and maintain program statistics, as well as facilitate the dissemination of information and feedback.
To start the process, the debtor files a Proposed Stipulation to Participate in MMMWD and serves a copy on the lender. The lender has 60 days to respond to the Proposed Stipulation. The Proposed Stipulation states the requirements to qualify for MMMWD, including:
- Debtor has regular income and is the owner occupant of a residential property used as debtor’s primary residence (investment properties do not qualify).
- Debtor has a mortgage balance of less than $729,750, and the mortgage payment is not affordable due to financial hardship.
- Debtor will make monthly post-petition mortgage payments of 31% of debtor’s gross monthly income or 75% of the Debtor’s current mortgage payment, whichever is less, starting the next monthly scheduled due date (plus any grace period) after the Stipulation is filed.
- Debtor must have filed complete bankruptcy schedules, and must provide lender with required documents and forms via the DMM Loss Mitigation Portal, however the lender is not required to use the Portal and can request alternative document transmission. To register for the Portal, go to www.dclmwp.com.
- Debtor must pay a mediation fee of $200 to the mediator and attend the mediation session. Debtor must pay $25 to use the DMM Loss Mitigation Portal. These fees are not refundable under any circumstances. The mediation is to be completed within 60 days of the appointment of the mediator.
- If MMMWD is successful and the mortgage is modified, the debtor agrees not to voluntarily dismiss the Chapter 13 bankruptcy for 9 months, to enable the debtor to establish a track record of paying the modified mortgage payments.
- If MMMWD is not successful, the debtor agrees that either the automatic stay will be lifted or the debtor will promptly propose an amended Chapter 13 plan to pay the original mortgage.
Mortgage lenders participating in MMMWD will also pay $200 to the mediator, and will upload their document requests and review documents and forms using the DMM Loss Mitigation Portal. Lenders who are willing to participate in the program, but are not yet set up to use the Portal may participate by special permission of the Judge. Lenders are encouraged to use the Portal as it is the most cost-effective way for the Debtor to provide the required documents. By consenting to MMMWD, the lender agrees to appoint a representative with knowledge of the lender’s loss mitigation programs and either settlement authority or access to an underwriter with settlement authority. This representative will participate in the mediation sessions by telephone or video conference. The lender also agrees to act promptly and in good faith to consider the Debtor’s mortgage loan for modification. If the MMM is successful, the lender will promptly prepare the necessary documents, and, if requested, the Court will approve any modification agreed upon by the debtor and lender.
By participating in MMM, the lender and debtor agree to entry of a Mortgage Modification Mediation Order. This is only a summary. Debtors and lenders are encouraged to read the terms of the Motion, Consent and Order to familiarize themselves with the terms of the program.
Questions about MMM can be directed to the MMMWD Mediator Management Committee via email at email@example.com