PHH Mortgage assessed $472.25 in post-petition fees against the Debtor’s loan, but did not file and serve a notice pursuant to Rule 3002.1(c) of these fees within 180 days, asserting that these fees were not presently recoverable against the Debtor or their residence and will not be collectible unless the Debtors’ Chapter 13 case was dismissed or converted. PHH asserted that it was required by N.C.G.S. § 45-91 to send notice to the Debtors of these fees, even if not currently intended to be collected.
The bankruptcy court rejected this argument, finding that Rule 3002.1 applied to these fees as “[a]sserting a fee has been charged and then making a conditional promise to waive the fee if certain conditions are met is still an assertion of a fee as recoverable.” Further, as both the Supremacy Clause and N.C.G.S.… Read More
The Debtors filed Chapter 7 and indicated on their Statement of Intentions they intended to retain the real property, with an estimated value of $430,000. U.S. Bank sought relief from the automatic stay, asserting that the Debtors owed $639,365.25 in total, with a delinquency of $145,703.92.
Sua sponte, the bankruptcy court held that U.S. Bank (and/or its servicer, Select Portfolio Services) had failed to establish that it owns or has the right to enforce the promissory note secured by the Property. The bankruptcy court noted that while the Motion for Relief asserted, by way of two Affidavits, that U.S. Bank was “ a creditor by virtue of the fact that the note was transferred by way of allonge.”, neither of the Affidavits actually includes such an allonge.… Read More
Loss mitigation actions (e.g., liquidation, renegotiation) of delinquent mortgages might be hampered by conflicting goals of lenders at different seniority. In particular, a servicer has less incentive to take certain actions to reduce losses of investor-owned first lien mortgages if the servicer happens to own the second lien claim secured by the same property. Rather, the servicer has an incentive to hold up loss mitigation as it seeks to preserve the values of its own, junior, claim. The Study shows that a sizable fraction of delinquent mortgages with multiple liens are indeed characterized by the servicer holding a direct financial interest in the junior liens, but not the first-lien mortgage.… Read More
Doral agreed in an Interim Servicing Agreement (“ISA”) to take over servicing of Federal Home Loan Mortgage Corporation (“Freddie Mac”) mortgages previously serviced by R&G Mortgage Corp. (R&G). R&G, however, successfully block this assignment. Even though it never actually serviced these mortgages and incurred actual costs of only $124,588.00, Doral then sought 24-months of servicing fees as compensation, as required under the ISA. Freddie Mac argued that Doral was not entitled to such fees, as Freddie Mac had never determined and communicated to Doral by a separate communication the effective date on which Doral would commence servicing the mortgages.
Agreeing with the district court, the 4th Circuit found both that the ISA required a specific notice of the effective date of servicing and also that the enforcement of 24-months of servicing fees would not “reasonably forecast Doral’s loss”, as it was over 87 times the actual damages. … Read More