My First Chapter 13 Mortgage Mediation: A Waste Of Time Because Bank Unprepared

I was involved in my first mortgage modification today under the Orlando bankruptcy court’s mortgage mediation program for Chapter 13 debtors. The scheduled mediation was a complete waste of time.

The bankruptcy court issued its newly adopted standard mediation order requiring attendance of a bank representative with full settlement authority. A mediation conference was scheduled at the office of the creditor’s attorneys. Before the scheduled mediation conference my office prepared a notebook containing all of the debtor’s relevant financial information such as pay stubs, bank statements etc. My client, I , and the mediator (a bankruptcy attorney himself) showed up on time at the designated location. The location was a 35 minute drive to and from my office and about the same distance from my client’s location.

When we all sat down to begin discussions the bank  representative announces he is unable to proceed with the mediation because he does not have escrow information from his own bankruptcy department. He says the bank will need a few days to acquire their own data and compute offers to present my client. The mediation is continued; the meeting adjourns with nothing accomplished. A total waste of two hours of time for my client and myself.

The mediation program is new. Some snafues will occur. What really ticked me off, however, was that the BOA representative did not even apologize for ruining a mediation conference scheduled mutually in advanced pursuant to a court order. Not one word of apology or regret for the lender's  lack of preparation. Don't they teach their employees manners? Who do they expect is going to pay for my time and the time my client took off from work? I may address that issue later in this bankruptcy.

So, if you are getting ready for  a Chapter 13 mortgage mediation do not assume the bank representative will be prepared at the scheduled conference. I will for all future mediation conferences confirm in writing prior to the meeting that the bank and their attorney have all the information they need from the debtor, and that they also have all the information from their own records which they need to proceed. Unless the bank attorney confirms their total and complete readiness to mediate with my client I am not getting up from my desk.  I've  wasted enough of my time.

Comments

[Chuck Richards]

as anyone heard if this mediation program will be used in the Southern District of Florida?

[Harry Hackney]

The problem isn't a lack of manners. The problem is a surfeit of BIG BANK arrogance. Don't you know that you and your client should be grateful that they even sent someone? (Note the sarcasm.) I think they're sitting pretty thanks to government TARP funds. This insulates them from the realities of the current marketplace. Consequently, they have no desire to work with borrowers and no sense of urgency. They really couldn't care less.

Absent government help they'd have to recognize the realities of this recession and would have to try a business like approach to cut their losses. That would require working with borrowers to salvage what they could. That's not how they're behaving so I have to think it is the government bail out triggering the law of unintended consequences.

[Charlie Sullivan]

That made me mad just reading about it. File an adversary for contempt of court. Attorneys fees, costs, punitives... you know your judge and how he/she will react to a debtor's being out of work for such a waste of everyone's time. It could be worth the effort for both you and your client.

[Dokemion]

While most of the changes under the bew bankruptcy laws are aimed at those looking to discharge their debts under Chapter 7 Bankruptcy, there are some changes to the process of filing Chapter 13 Bankruptcy as well. Under Chapter 13, the person declaring bankruptcy will still work to pay back the debts. The creditors will work out monthly payments based on how much the individual has after accounting for living expenses. However, under the new bankruptcy laws, the IRS decides how much the living expenses should be. The individual filing bankruptcy has no control over the living expenses. This means that many people have to live on far less than they are used to having, causing many changes in their standards of living.

[Rick Baker, Esq.]

Jon, I am on a working group with the 13 Trustee to help amend the Mediation Order to prevent what you experienced. Some possible changes might be to require a no show or unprepared creditor pay for the mediation. Another possibility is that the Trustee not disburse payments to the mortgage co until after mediation is complete. What other changes would you suggest? Our Judges want this to work. Attorney Richard Baker - www.legalquestion.com