Consumer Bankruptcy Journal Fall 2015 - Page 40

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 40 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