CACB — Procedures For Loan Modification Management Program

Source: https://www.cacb.uscourts.gov/sites/cacb/files/documents/general-orders/GO%2024-01.pdf

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3 JAN 25, 2024 4

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8 UNITED STATES BANKRUPTCY COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10

11 In re: PROCEDURES FOR LOAN 12 MODIFICATION MANAGEMENT GENERAL ORDER 24-01 PROGRAM13

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15 The United States Congress created procedures to follow when parties seek to 16 mitigate losses when a real estate loan is in distress, namely 12 CFR 1024 (Regulation17

18 X, Loss Mitigation Procedures). While in bankruptcy court, it can be difficult for the

19 parties to invoke and comply with these statutory requirements in conjunction with 20 relevant provisions of the Bankruptcy Code (“Code”) and Federal Rules of Bankruptcy 21 Procedure (“FRBP”). 22 In 2017, U.S. Bankruptcy Court, Central District of California (USBC-CD) created23

24 a pilot program to meet this challenge. In 2023, the Board of Judges voted to make this

25 program permanent. The title of this program is the Loan Modification Management 26 Program (“LMM”) as implemented in the Central District of California within regulations 27 referred to above, and within our Local Bankruptcy Rules (“LBR”). 28

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The LMM is managed by a vendor approved by the USBC-CD and is a forum for 1 2 debtors and creditors to reach a consensual resolution – or loss mitigation -- when a

3 debtor’s Eligible Property is at risk of foreclosure related to a creditor’s Eligible Loan. 4 Loss mitigation means the full range of solutions that may prevent either the loss of a 5 Debtor’s Eligible Property to foreclosure, increased costs to the Creditor, or both, 6 including but not limited to loan modification, loan refinance, forbearance, short sale, or 7

8 surrender of the Eligible Property in full satisfaction of obligations arising under an

9 Eligible Loan. The goal of the LMM is to facilitate communication and exchange of 10 information in a confidential setting and encourage the parties to finalize a feasible and 11 beneficial agreement under Court supervision. 12

13 IT IS ORDERED: Participants in the LMM must comply with LMM Procedures 14 and LMM Forms that are posted in section 3-10 of The Central Guide and at related 15 links on the court’s website. Special Tab: LOAN MODIFICATION MANAGEMENT 16 PROGRAM | Central District of California | United States Bankruptcy Court 17 (uscourts.gov) 18

19 DATED: January 25, 2024 20

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22 THEODOR C. ALBERT Chief Judge 23 United States Bankruptcy Court 24

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