Consumer Bankruptcy Journal Fall 2015 - Page 41

MORTGAGE SERVICING ABUSES 12. The failure to advise the debtor of cancellation rights with respect to private mortgage insurance. 13. The failure to notify the debtor of any change in the monthly mortgage payment due to an increase in taxes. 14. The failure to notify the debtor of any change in the monthly mortgage payment due to an increase in insurance rates. 15. The unilateral post-petition conversion of a nonescrowed mortgage to an escrowed mortgage without court approval. 16. The purchase of a property tax claim postpetition so as to increase monthly revenues and funds available for use in suspense accounts. 17. The use of various forms of “suspense accounts” to hold money for over-night investment rather than applying money to the outstanding principal and interest. 18. The failure to apply payments received from the trustee and the debtor pursuant to the “Application of Payments” Covenant in the Uniform Mortgage Instruments. 19. The failure to apply for Court approval of all “corporate advances” as required by the Uniform Mortgage Instruments, applicable Bankruptcy Law, and Rule 2016(a) of the Rules of Bankruptcy Procedure. 20. The failure to notify the debtor or the trustee of any change in the monthly payments due to a reset of the mortgage interest rate. 21. The failure to advise the consumer credit reporting agencies that the mortgage is current after the entry of the discharge in bankruptcy. 22. The regular imposition of additional legal fees during the life of the Chapter 13 case without any notice and hearing and court approval. 23. The systematic misapplication of trustee payments on the arrears and debtor payments on the direct payment obligations. 24. The diversion of improper National Association of Consumer Bankruptcy Attorneys Winter 2015 fees and charges to various “restricted” corporate advance accounts so that they will not appear on any bill or statement issued during the pendency of the chapter 13 case. 25. The charging to the debtor of legal fees for services that are in reality services provided by non-lawyers or by automated delivery systems. 26. The out-sourcing of core servicing functions for the purpose of enhancing the overall fees generated for each loan serviced. By atomizing the fees, the servicers can charge less per each service but more for all services. 27. The charging to the debtor of fees for services that are never actually performed. 28. The investment of payments received from debtor in over-night interest bearing accounts and holding funds in those accounts in order to capture the “interest” received on floating this money between receipt and disbursement. 29. The holding of payments in suspense so as to create CONSUMER BANKRUPTCY JOURNAL 41