New Jersey Judiciary Foreclosure Mediation Program Update
On May 18, 2009, the United States Bankruptcy Court for the District of New Jersey issued a General Order with respect to the New Jersey Judiciary Foreclosure Mediation Program. This Order clarifies that participation in the Foreclosure Mediation Program, where the homeowners have filed for Bankruptcy, does not violate the automatic stay. Furthermore, a mortgagee does not have to obtain relief from the automatic stay to participate in the Foreclosure Mediation Program.
In addition, this Order makes it clear that in Chapter 13 cases, the debtor is obligated to continue to make regular monthly mortgage payments as well as required payments to the Chapter 13 trustee during the time the mediation process is pending.
This Order further makes clear that if the automatic stay was in place during participation in the program, it remains in place. If the mortgagee wishes to continue with any foreclosure proceeding, relief from stay must be granted by the Bankruptcy Court.
Finally, this Order directs that any resolution or settlement, including any modification to the mortgage, must be approved by the Bankruptcy Court. If any settlement impacts a provision of a Chapter 13 Plan, a modified plan must be filed.