Written by attorney Carole Suzanne Bess

Mortgage Modification Through Chapter 13

If you are one of the thousands in Central Florida who can’t make your mortgage payments, there is new hope for you to save your home. The Orlando Division of the Florida Middle District Bankruptcy Court has a new program that is helping homeowners’ mortgages in chapter 13 bankruptcy plans. Brevard attorney, Carole Bess of Bess, Blougouras, Freyberg & Pennington are part of the Florida Middle District Bankruptcy Court of the Orlando Division Chapter 13 Bankruptcy Sub-Committee that created the mortgage modification mediation program in chapter 13 bankruptcy cases.

“76% of the mortgage mediations in Chapter 13s have been successful, since the program started June 2010," says Laurie Weatherford, the Chapter 13 Standing Trustee of the Orlando Division of the Middle District Bankruptcy Court.

On the other hand, “[t]he success rate of mortgage modifications in Brevard County State Courts is about 4%," states Ms. Bess.

The mortgage modification mediation is the first of its kind in this country, and it has had phenomenal results in helping people save their homes in Central Florida. Ms. Bess worked with Laurie Weatherford, and several other attorneys, including two attorneys who represent mortgage companies in bankruptcy proceedings, and mediators to develop the program in Orlando.

“ We originally hired another attorney to do foreclosure defense work. We had to have her quit doing mortgage modifications in state court, and stop doing foreclosure defense in state court, because it is demoralizing to have so many mortgage modifications and foreclosure defenses fail. We had that attorney concentrate all of her efforts to save people’s homes in chapter 13 bankruptcy mortgage modification programs," Ms. Bess went on to say.

“It is very rewarding to keep our clients in their homes, and to finally offer them some relief from their mortgage payments. Any other avenues we tried prior to the chapter 13 mortgage mediation program, had very little chance of saving our clients’ homes, and it was hard to tell people that they were going to lose what was in some cases, the only home their children had ever known," explained Ms. Bess.

“I represent many elderly couples, as well. These clients have done everything they were supposed to do all of their lives. They followed all of the rules. They saved; they didn’t overspend, and paid their mortgages and other bills. Now, that they have retired, they have seen their investments in the stock market and 401Ks disappear, their property values on their home drop, and their health expenses and other costs go up. These senior citizens had scrimped and saved to put their children through school, and worked all of their lives. They had planned to live out their days in their home. It was heartbreaking to tell these people they needed to pack all of their belongings and get ready to move. These couples just couldn’t conceive of moving at their age and this time in their lives. In many cases, losing their homes is the last straw in their efforts to maintain their dignity. It makes my day to be able to rid of their bills, and then get their mortgage payment that is affordable with their fixed incomes. Keeping their homes saves their pride, and makes living through this recession bearable." said Ms. Bess.

“Bankruptcy has long had the stigma of failure. In reality, it is simply a good business decision, many people have to make right now. It is not people’s fault that there have been so many lay-offs in our economy, the housing market plummeted, and their retirement plans’ have lost so much value. Now that this chapter 13 mortgage modification program is available, I am at least able to help people salvage something from this economic disaster," Ms. Bess stated.

“People have to live somewhere, and it is better for the individuals who have emotionally and fiscally invested in their home to stay in their homes. It’s better for their neighbors, and it is better for their communities." stated Ms. Weatherford at a recent luncheon presentation given by Ms. Weatherford, Ms. Bess, and Wayne Spivak, an attorney for many mortgage companies.

Michael and Janice Doty are two of Ms. Bess’s and Ms. Jones’s clients who saved their home through the chapter 13 mortgage modification program. “Without Carole’s office’s efforts and this program, we would have lost our home, " stated Mr. Doty, who lives in Pt. St. John.

“I am on Social Security Disability, and legally blind. My wife, Janice, was out of work for several weeks, because of surgery. Ms. Bess was able to modify my chapter 13 plan, and get my mortgage current, and reduce the payments I was making through my chapter 13 plan," says Mr. Doty.

The success of the mortgage modification program in the Orlando Division, has attracted a lot of attention. “I visited the Tampa Division’s Bankruptcy Bar, and spoke about the program in September of this year, and I know another bankruptcy attorney in Orlando, Robert Branson, has spoken at another local bankruptcy bar in Jacksonville." stated Ms. Bess.

“It is gratifying that Debtors’ attorneys and Creditor’s attorneys worked together in the Orlando Division to put such a successful program together. Considering the discord and strife among the political parties in Washington, it is nice to see opponents work together to accomplish something that is good for homeowners and the banking institutions as well. In this dark economy, the Orlando Division of the Bankruptcy Court is one bright spot." Ms. Bess concluded.

Additional resources provided by the author

The Middle District of Florida, Orlando Bankruptcy Division

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