Bankr. E.D.N.C.: In re Greene- Denial of Amendment of Order Deeming Mortgage Current

Summary:

In the case of William and Rebecca Greene, the bankruptcy court  denied BSI Financial Services' motion to amend an order that deemed the mortgage current. The original order, issued on November 16, 2023, stated that the mortgage was current with a balance of $105,505.65, based on the amount provided by BSI itself. BSI later claimed this amount was incorrect and sought to amend it to $134,296.39. However, the court found that BSI did not provide sufficient evidence or justification for the amendment, noting multiple errors in BSI's filings and lack of witnesses at the hearing. Consequently, relying on In re Devita, Case No. 12-02549-5-SWH (Bankr. E.D.N.C. May 31, 2018), and Specialized Loan Servicing, LLC v. Devita (In re Devita), 610 B.R. 513 (E.D.N.C. 2019) the court ruled against BSI, maintaining the original order and mortgage balance as stated as it failed to demonstrate:

1. That the motion is timely;
2. That the moving party has a meritorious claim or defense; 
3. That the nonmoving party will not suffer unfair prejudice; and 
4. That exceptional circumstances justify relief.  

Commentary:

The amendments to Bankruptcy Rule 3002.1 become effective in December 2024,  requiring that the outstanding principal balance on a residential mortgage be determined.  The long-standing practice in the Eastern District of North Carolina  of making this determination will,  especially though this and the Devita opinions,  serve as guides for other courts that have up until now been hesitant to make this determination.

There is a frequent assertion by mortgage services that it is somehow too difficult to determine that principal balance:

For the vast majority of home mortgages, excluding those with adjustable interest rates, which are slightly more complicated, and Daily Simple Interest notes, which do require an advanced accounting degree, by curing and maintaining the on-going mortgage payment, that outstanding principal balance should be exactly the amount owed as shown on the original amortization schedule for the loan. Very nice work by Jeremy Harn.