April 9, 2015
by Andrew A. Powell
Scott and Corley, P.A. – USFN Member (South Carolina)
One of the bankruptcy judges for the District of South Carolina (Judge John Waites) recently issued new Chamber Guidelines for cases assigned to him. As part of these guidelines, effective April 10, 2015, all loss mitigation negotiations must occur under the Default Mitigation Management (DMM) portal. The DMM portal is an electronic interface that allows servicers and borrowers to exchange documents and communicate about loss mitigation. Barring a court order stating otherwise, the DMM portal will be the exclusive method for loss mitigation review. Furthermore, as part of these new procedures, the bankruptcy court must enter an order prior to the commencement of any loss mitigation review between the servicer and the borrower.
These guidelines provide that creditors/servicers have an affirmative duty to update the court of any and all non-DMM loss mitigation developments. Therefore, if your company solicits borrowers for loss mitigation, it is recommended that you contact your local bankruptcy counsel to ensure that the court is being properly and timely updated. Failure to abide by these new requirements could result in sanctions from the bankruptcy court.
Please note that this new procedure only affects loans that are involved in bankruptcy cases assigned to Judge John Waites. These changes do not apply to all South Carolina bankruptcy cases. Specifically, and at this time, bankruptcy cases assigned to Judge Helen Burris or Judge David Duncan do not require the use of the DMM portal and will not be affected by these new guidelines. A copy of Judge Waites’s Chamber Guidelines may be found here.
©Copyright 2015 USFN and Scott & Corley, PA. All rights reserved.