Consumer Bankruptcy Journal Fall 2015 - Page 17

MORTGAGE LOANS 3. Borrowers who had a contract to sell their home by way of a short sale, the servicer failed to make a decision within 30 business days from submission of application and the buyer withdrew. 4. Borrowers with loan modifications where the loan modification has not been honored by a loan servicer or successor loan servicer. 5. Borrowers who have trial loan modifications that last beyond three months. 6. Borrowers with Lender Placed or Forced Placed Insurance. 7. Borrowers with excessive escrow deficiencies. 8. Borrowers with a loan modification that is not recognized by a new servicer. Practitioners should be on the look out for the following fact patterns that form the basis of a RESPA claim: 1. When Homeowner/ Borrowers have submitted a facially complete loan modification application and loan servicer moves forward in any way to foreclose. (This includes referral to foreclosure counsel, Filing of a Foreclosure Complaint in a Judicial Foreclosure state, Filing or recording a foreclosure notice in an non judicial state, Filing a motion for relief from stay in Bankruptcy, filing a Dispositive motion in a judicial foreclosure, setting a date for a sheriff’s sale or failing to avoid a judgment or withdraw a sale. 2. When a mortgage loan servicer fails to honor an agreed to Loan Modification. 3. When a mortgage loan Servicer fails to make a decision on a Short Sale within 30 Business Days. 4. When a mortgage loan servicer refers for foreclosure before a borrower is 120 days past due. 5. When a mortgage loan servicer ails to properly calculate escrow or an escrow shortage and overcharges to amortize escrow shortages. Note that a servicer may only hold a two month cushion for taxes, homeowner’s insurance and private mortgage insurance in escrow. currently exempt) This happens more often than one might think. 3. When a mortgage loan servicer fails to apply payments on the same day as they receive them. 4. When a mortgage loan servicer applies payment to fees or corporate advances before principal interest taxes and insurance are brought current. 5. When a mortgage loan servicer fails to provide the name of owner, master servicer and servicer within 10 business days of the date of receipt of written request, payoff or reinstatement figures within 7 business days of receipt of written request. 6. Charging for unnecessary appraisals, legal fees, property inspections and other corporate advances. Practitioners should also be aware of potential claims under TILA: 1. When a mortgage loan servicer fails to provide correct information on Monthly Statements to Borrower (Borrowers in Bankruptcy are currently exempted) For example, for someone who is 45 days behind, each statement is required to show a 6 month history. 2. When a mortgage loan servicer fails to send statements at all (Borrowers in Bankruptcy or Discharged from Bankruptcy are National Association of Consumer Bankruptcy Attorneys Winter 2015 CONSUMER BANKRUPTCY JOURNAL 17