My Attorney will not deal with this so I have to but do not know how.

[Targetonback]

Hello,

I have several questions regarding a mortgage servicer and would appreciate any advice I can get. My questions are:

*Can a servicer change (increase it) a fixed rate interest rate?

*Can the trustee change the fixed interest rate (increase it) when we are in a chpt. 13 paying 100% plus 10 % of the payment amount to the trustee for 60 months? If so what could be the trustee’s rational behind this action? Or can the servicer raise our fixed rate mortgage by over 1% without any notification?

• Can the servicer charge late fees when the trustee doesn’t make the payments on time?
• Can the servicer pay their added dishonest/underhanded “fees” before they pay principle and interest when the payments being made by the trustee specify, principle” then gives a dollar amount & “interest ” also with a specific dollar amount?
• Can a servicer reverse payments made by the trustee?
• Can a servicer delete an escrow account, which has been in place since the inception of the loan, then lower the payment amount, then amend it back to when they acquired the loan to not show escrow, then not pay the taxes or insurance? Then force their insurance on you? This occurred about 2 months after the confirmation. The trustee filed a motion to dismiss b/c the, “confirmed plan was not feasible” due to “escrow.“ The servicer did not credit the amount of that difference back on the loan.
• Is there a website or place that breaks down servicer regulations in a bankruptcy?

I would sincerely appreciate any advice or answers to these questions. A little back ground, we are in a chapter 13 paying 100% of what we owe and 10% to the trustee. My attorney has basically said he won’t do anything more without further payment, $3000 upfront. He has told me to deal with all of this myself. I would fire him if I had money to retain a different one.



The trustee amended our plan in May due to escrow then the mortgage company stopped the escrow. The trustee finally paid for, “escrow” September 1st but no one has paid my homeowners insurance. My mortgage servicer took the entire escrow amount off of their fees. They did not pay the insurance, they did not apply any of it to the taxes, which are current but now according to my records have been paid twice. I now find out my attorney told my insurance agent that she or I need to deal with this so I am sure now that I have no insurance. So far this fiasco has cost us an extra $900 in attorneys fees approved by the court and yet our insurance has still not been paid. This is on top of the $5000 we have already paid him. I have contacted my attorney 8 times in 4 months about this. I have had 2 responses from a para saying she will ask our attorney and get back with me, then silence until I send an additional 2 or 3 notes. Ours is not an overly complicated bankruptcy. We only had a mortgage, a heloc, and 1 credit card and 2 medical bills included.




To top it all off, our trustee suddenly “retired” effective immediately on Sept. 28th. The trustee from a larger district has taken over temporarily until they get a new trustee so I am sure he is overwhelmed already. Let me just mention We have been on top of the radar list I think. Motions to dismiss almost monthly for minor things and things we have no control over. We are only in month 11 and all of this stress is severely impacting my health.




One more question. Can I complain to the attorney general, consumer protection, controller of banks and the bar association (maybe, but not yet) regarding these servicing abuses? I have attempted to solve the banking issues and mortgage issues with the companies/bank, have filed formal complaints and have received 0 response. Have requested information and not received it. Everyone ignores me and doesn’t think I will take it further. So far these abuses have cost over $15,000 extra added onto our mortgage. Do I have any protection from anyone from this during the bankruptcy? The only reason we filed was b/c of these mortgage issues. I mistakingly thought I would have the protection from an attorney and the bankruptcy courts while going through this hellish experience. This is not the way it works I guess unless you have a lot of extra money that the trustee doesn’t take. I have concrete proof of everything. Where can I turn for help? It honestly feels as if there is a large target on my back.

[justbroke]

*Can a servicer change (increase it) a fixed rate interest rate?

You'd have to look at your promissory note and its riders to see what is allowed contractually. Generally, if you have a fixed rate note with no "ARM" rider then the mortgage is fixed. Another issue, sometimes, is that the mortgage is an Interest Only mortgage. These will also have a rider which charge only the interest for a period of time (1 year, 5 years, whatever is in the rider), and then automatically convert to paying interest plus principal at that time. (Just using that as an example of a contractually allowed change in payment.)

Can the trustee change the fixed interest rate (increase it) when we are in a chpt. 13 paying 100% plus 10 % of the payment amount to the trustee for 60 months? If so what could be the trustee’s rational behind this action? Or can the servicer raise our fixed rate mortgage by over 1% without any notification?

There's not enough information to know if the fixed rate was changed. Do you pay your mortgage "inside" the plan or "outside" the plan? How do you know the interest rate changed? The interest rate cannot change unless the confirmation order (the plan) shows that the payments contractually change.

Can the servicer charge late fees when the trustee doesn’t make the payments on time?

Technically no. However, this is a major issue inside Chapter 13s. All servicers and lenders use computer systems that automate much of how the account is handled. These systems do things automatically. This includes adding fees when payments are "late" despite a Chapter 13, where the payments are paid through the Chapter 13 Trustee, not allowing such fees.

Can the servicer pay their added dishonest/underhanded “fees” before they pay principle and interest when the payments being made by the trustee specify, principle” then gives a dollar amount & “interest ” also with a specific dollar amount?

See response to last question. This is a known system problem. Many Chapter 13 debtors, that had arrears before filing and those arrears are in plan, have issues with suspense accounts and "old" fees being posted incorrectly to the account. This then causes other fees. Usually, this is all sorted at the end of the Chapter 13 (as part of discharge and closing).

Can a servicer reverse payments made by the trustee?

How? The Chapter 13 Trustee pays via check.

Can a servicer delete an escrow account, which has been in place since the inception of the loan, then lower the payment amount, then amend it back to when they acquired the loan to not show escrow, then not pay the taxes or insurance? Then force their insurance on you? This occurred about 2 months after the confirmation. The trustee filed a motion to dismiss b/c the, “confirmed plan was not feasible” due to “escrow.“ The servicer did not credit the amount of that difference back on the loan.

Escrow accounts are black magic to me. Whenever there are escrow shortages all sorts of things happen. I can't speculate what is going on, but in some cases, escrow may no longer required when the LTV is below 80%. Usually a servicer/lender will tell you when they intend to stop impounding (escrowing) taxes, insurance, and/or HOA fees. Usually the lender will send you an annual escrow report showing you what they're doing with the escrow.

Is there a website or place that breaks down servicer regulations in a bankruptcy?

Probably not anything specific to bankruptcy. The bankruptcy code (Title 11) and the Federal Rules of Bankruptcy Procedure (FRBP) would apply. The interpretation of how those apply are best left to attorneys that are in the practice of bankruptcy.

One more question. Can I complain to the attorney general, consumer protection, controller of banks and the bar association (maybe, but not yet) regarding these servicing abuses?

I don't know if they're abuses. Did you say that the servicer changed? I think this is likely a myriad of otherwise small issues (change of servicer, change in escrow, and bankruptcy) but combined they create a perfect storm.

I have attempted to solve the banking issues and mortgage issues with the companies/bank, have filed formal complaints and have received 0 response. Have requested information and not received it. Everyone ignores me and doesn’t think I will take it further. So far these abuses have cost over $15,000 extra added onto our mortgage. Do I have any protection from anyone from this during the bankruptcy?

Yes, but your attorney is the best place to seek any issues.

The only reason we filed was b/c of these mortgage issues.

Are you saying that there were already rather "complex" or perplexing issues with the mortgage that were to be resolved by filing bankruptcy? A Chapter 13 bankruptcy, in my opinion, would only amplify existing servicing issues.

I mistakingly thought I would have the protection from an attorney and the bankruptcy courts while going through this hellish experience.

Most people do not understand the attorney's job in a Chapter 13. Their so-called "no look" fee is to get you to confirmation. Anything above and beyond "monitoring" the case -- for things like motions to dismiss -- are not covered in that fee. If you have additional things that require the attorney's time above and beyond confirmation, then they can charge for that work. This should have been in your engagement letter/fee agreement when you retained the attorney for the Chapter 13.

The attorney will help you at their hourly rate. The issue may be that the problem was already well rooted prior to filing. Servicing issues can a major issue even outside of bankruptcy.

This is not the way it works I guess unless you have a lot of extra money that the trustee doesn’t take. I have concrete proof of everything. Where can I turn for help? It honestly feels as if there is a large target on my back.

Your attorney, but you will need to pay them their post-confirmation rate.

You have a lot of moving parts related to this mortgage. If those were there prior to filing, the filing did nothing but exacerbate the issue(s).

[Carmella]

You have a lot of questions and I don't know much about the answers.

I know that we were not charged late fees and were told we would not be charged any, but I paid outside the plan and kept on time payments.

My insurance was never paid through the mortgage so I continued to pay it.

My taxes were included in the mortgage payment as usual.

My payment only changed when the taxes increased/escrow changed and some sort of legal form was sent from the bank's attorney to the trustee and my attorney. My HELOC increased ALOT because as justbroke mentioned interest only. My HELOC was interest only for 10 years then the payments went from around $30-40 to $120 ish. Which was a bit considering we had little to no disposable income. I didn't realize that was coming and was surprised to see it. And the interest was variable on the HELOC so that would change, but it was not a huge amount. We also paid the HELOC outside the plan.

Maybe there's a difference paying "outside the plan" because I was able to call the bank and talk to people/ask questions, etc. I also had a mortgage with a local bank with a good reputation for being very conservative. They waited years before offering a debit card and when they did they had an agreement with another bank to use their ATMs. My bank has no ATMs of their own.

[flashoflight]

Targetonback

Answers in bold:

*Can a servicer change (increase it) a fixed rate interest rate?

No. The HELOC is unlikely to be fixed rate unless you exercised a fixed rate option. Variable rate minimum monthly payments have gone up substantially since March 2022. If your 1st mortgage was an ARM (like 7 years fixed then adjustable), the lender can charge you the higher interest rate according to the note if it is past the fixed period.

You may have heard chapter 13 is flexible and only pays what is affordable. That doesn't apply to secured debt. The interest rate increases have made most variable rate mortgages unaffordable to many.


Can the trustee change the fixed interest rate (increase it) when we are in a chpt. 13 paying 100% plus 10 % of the payment amount to the trustee for 60 months? If so what could be the trustee’s rational behind this action? Or can the servicer raise our fixed rate mortgage by over 1% without any notification?

No. But an increased payment would suggest your mortgage is variable rate or your escrow is increased.


Can the servicer charge late fees when the trustee doesn’t make the payments on time?

No. No more late fees or property inspection fees. The lender will still probably drive by your home every month though.

Can the servicer pay their added dishonest/underhanded “fees” before they pay principle and interest when the payments being made by the trustee specify, principle” then gives a dollar amount & “interest ” also with a specific dollar amount?

No. You owe the dishonest junk fees at the end of the mortgage. I recommend you don't fight the bank's attorney on this because they will add more fees to respond to your complaint/objection. It's not worth dying on this hill.

All payments (trustee or you) go to suspense and then are paid to principal, interest, and escrow when the suspense has one month's payment. If the proof of claim was correct, you will be caught up on principal, interest, and escrow after month 60 and you will be considered current on the mortgage. That leaves just the junk fees and pre-petition late fees at the end of the mortgage to pay off. I seriously doubt there are late fees added post-petition to your mortgage.

Can a servicer reverse payments made by the trustee?

No, the bankruptcy makes it impossible for the lender to refuse payments like they did pre-petition.

Can a servicer delete an escrow account, which has been in place since the inception of the loan, then lower the payment amount, then amend it back to when they acquired the loan to not show escrow, then not pay the taxes or insurance? Then force their insurance on you? This occurred about 2 months after the confirmation. The trustee filed a motion to dismiss b/c the, “confirmed plan was not feasible” due to “escrow.“ The servicer did not credit the amount of that difference back on the loan.

Yes. It is in the best interest of the lender to pay your homeowner's insurance rather than stiffing them. Either your insurer refused to renew you, you made changes to your homeowner's policy that were unacceptable to the lender like dropping some coverages or reducing the limits too much, the loss payee was blank or incorrect, or the loss payee didn't include ISAOA if the loan was sold to another lender. If your loan got sold, I would have updated the loss payee although often the lenders do it automatically. For one of those reasons, the lender decided to put in their force plated insurance instead of paying your old insurer. You can fix this by getting your own insurance with terms and limits acceptable to the lender and letting the lender know. Make sure you list the lender as loss payee including the ISAOA.

The escrow credit amount don't matter until the end of the case. If the increased POC is correct, everything will be fine at the end. While your case is active, the lender treats your account as if it was current. Over the 5 years, the escrow will catch up.

[womanonfire]

Hello,

I have several questions regarding a mortgage servicer and would appreciate any advice I can get.

I consider myself a bit of an expert on RESPA and mortgage servicers and my former attorneys including BK attorneys agree that my knowledge of this is vast. I actually wrote an objection in reply to the magistrate judge's recommendation to dismiss my complaint for my former attorney and the district judge ruled in my favor and admonished the magistrate judge for her misunderstanding of the law. My case has been cited by other attorneys and is also mentioned in Malloy's Banking and Regulation. So my answer is going to be different and that is you should immediately send a qualified written request under RESPA to your mortgage servicer and ask them these questions.

Here is an article that will answer some basic questions and explain what it is and how to do it: https://upsolve.org/learn/qualified-written-requests/

Because my mortgage servicer filed for bankruptcy, the end result was that my claim against the state was approved for 50k. Not sure if I will get that or not but I do get the satisfaction of knowing that I was right.

I think it is worth the time and expense to write the QWR asking for information and pointing out any errors and to make sure that you follow up and keep track of your time and expenses while doing so.