“The deadline for filing a proof of claim in Federal Rule of Bankruptcy Procedure 3002(c) applies to all claims, including those of secured creditors.” In re Pajian, No.14-2052 (7th Cir. May 11, 2015). [Read more…] about Proof-of-Claim Deadline Applies to Secured and Unsecured Alike
Priority of Noteholders in Duplicate Note Scheme
A Florida appellate court addressing a fraudulent scheme involving selling duplicate promissory notes, found that “the bank that first perfected its interest in a note and related mortgage is entitled to the priority of its interest.” HSBC Bank USA v. Perez, No. 4D13-3193 (Fla. Dist. Ct. App. May 6, 2015). [Read more…] about Priority of Noteholders in Duplicate Note Scheme
Green Tree Servicing Settles with FTC and CFPB for $63 million
The Federal Trade Commission and the Consumer Financial Protection Bureau have announced a $63 million settlement in a dispute with the national mortgage servicing company, Green Tree Servicing. The FTC and CFPB charged Green Tree with thug-like collection methods including: barraging the debtor with phone calls as early as 5 a.m. and as late as 11 p.m.; threatening debtors with arrest, imprisonment, and garnishment; yelling at consumers and using obscene language; mocking illnesses and other personal situations causing financial distress; revealing debts to employers, neighbors, family; and taking payments out of debtors’ accounts without consent. It also failed to honor loan modifications, misapplied payments, provided incorrect creditor information to consumer reporting agencies, and overcharged or demanded unnecessary fees. $48 million of the settlement will go to affected consumers and $15 million represents civil penalties.
In addition to the $63 million dollars, the settlement requires Green Tree to clean up its act by implementing “a home preservation plan to offer options to consumers whose loans were transferred to the company during the time covered by the complaint.” It must cease collection on disputed debts until the completion of an investigation and verification of amounts owed. “The proposed order also prohibits Green Tree from making material misrepresentations about loans, processing procedures, payment methods, and fees, from taking unauthorized withdrawals from consumer accounts, and from violating the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, and the Real Estate Settlement Procedures Act.” In short, the order requires Green Tree to competently and honorably perform the services a loan “servicer” is meant to perform.
Supreme Court Finds Denial of Confirmation not Appealable Order
The Supreme Court unanimously decided today that denial of confirmation is not a final, appealable, order. Bullard v. Blue Hills Bank, 575 U.S. ___, No. 14-116 (U.S. May 4, 2015). [Read more…] about Supreme Court Finds Denial of Confirmation not Appealable Order
Objection to Discharge Should Have Been Dismissed as Untimely
The chapter 7 trustee failed to continue the creditors’ meeting to a specified date as required by Rule 2003(e) and therefore his later objection to discharge was untimely. In re Jenkins, No. 14-1385 (4th Cir. Apr. 27, 2015). [Read more…] about Objection to Discharge Should Have Been Dismissed as Untimely
Child Support Exclusion Not Reduced By Expense Deduction
The Seventh Circuit rejected the trustee’s argument to limit the debtor’s child support exclusion to those expenses that are not otherwise deductible under section 1325. In re Brooks, No. 14-2856 (7th Cir. Apr. 23, 2015). [Read more…] about Child Support Exclusion Not Reduced By Expense Deduction
Court Disapproves Modification to Pay Outside Plan
Using inflexible reasoning, a bankruptcy court found that the debtors could not amend their plan to make mortgage payments outside the plan. In re Vela, No. 12-06512 (Bankr. W.D. Mich. March 13, 2015). [Read more…] about Court Disapproves Modification to Pay Outside Plan
$2 Million Jury Verdict Against Mortgage Servicer
On Monday, Alena Hammer obtained a $2 million jury verdict against Residential Credit Solutions, Inc. (RCS), a national mortgage loan servicer, for its breach of contract, violations of the Real Estate Settlement Procedures Act (RESPA), and violations of the unfairness and deception provisions of the Illinois Consumer Fraud and Deceptive Business Practices Act. All of Hammer’s claims dealt with RCS’s misconduct in handling and servicing the mortgage loan on Hammer’s home in DuPage County, Illinois, where Hammer has resided for the last 27 years.
[Read more…] about $2 Million Jury Verdict Against Mortgage Servicer
Differing Interest Rates for Cure and Maintain
The terms of the underlying lending agreement dictated the interest rate applicable to the debtors’ cure and maintain provision in their chapter 13 plan. In re Anderson, No. 14-690 (E.D. N.C. April 6, 2015). [Read more…] about Differing Interest Rates for Cure and Maintain
Cert. Denied in LVNV v. Crawford
The Supreme Court has declined to take up the issue of whether filing a stale proof of claim in a bankruptcy case violates the FDCPA. Previously, the Eleventh Circuit found that a proof of claim to collect a stale debt in chapter 13 violates the Fair Debt Collection Practices Act. In Crawford, however, the Eleventh Circuit side-stepped the issue of whether an irreconcilable conflicts exists between the Bankruptcy Code and the FDCPA, such that creditor’s conduct in bankruptcy would not be actionable under the FDCPA.