MORTGAGE SERVICING ABUSES
MAX’S NIFTY FIFTY
By O. Max Gardner III
Law Offices of O. Max Gardner III
1. Failure to recalibrate the
loan on the books of the
servicer so as to bring
the account contractually
current on the software
accounting system used by
the servicer. Such action is
necessary in order for the
servicer to apply payments
received in a manner
consistent with the arrears
and fees in the proof of
claim and the direct postpetition payments.
2. The application of postpetition direct payments
received from the debtors
or the trustees to prepetition arrearages.
3. The application of
pre-petition arrearage
payments received from
the Trustee against postpetition corporate advances
rather than as credits
against the pre-petition
arrearage claim.
4. The advancing of legal
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CONSUMER BANKRUPTCY JOURNAL
fees, property inspection
fees and broker price
opinion fees incurred postpetition but pre-confirmation
without disclosing the
same in the proof of claim
or without filing a fee
application with notice to
all parties and the right to a
hearing.
5. The double-assessment
of escrow arrearages by
including them in the proof
of claim and seeking to
collect them by a direct
escrow review and analysis
with enhanced direct
monthly payment.
6. The imposition of monthly
late charges tha t arise just
because the “system” is
applying the post-petition
direct payments to prepetition arrears (“legacy
late charges”).
7. The charging of property
inspections fees every
32 days just because the
Winter 2015
“system” is reading the
payments as more than 32
days late (“legacy property
inspections”).
8. The charging of broker
price opinion fees every
60 days just because the
“system” is reading the
payments as more than 59
days late (“legacy broker
price opinion fees”).
9. The purchase of “forced
placed insurance” from a
“captive” company when
the debtor in fact has
insurance.
10. The failure to disclose the
amount of the commissions
received on “forced placed”
insurance.
11. The failure to give the
debtor a credit for refunds
of “forced placed” insurance
after the debtor proves
he has secured private
insurance.
National Association of Consumer Bankruptcy Attorneys