Must I pay my mortgage bank's legal fees?

[lillymarlene]

I just received a Loan Notice today from my new mortgage bank, NewBank, (not their real name) that looked almost like a regular statement but listed the amount under "other" for $900. My fixed rate mortgage payments are for around $700 per mo.
I called NewBank and asked, since I thought it was a "regular statement," why this payment was so high.

The person in the loan department, said that this was for legal fees from OldBank because I had gone into bankruptcy and filed a chapter 13. The legal fees were because OldBank had to pay their attorney to file a claim against my bankruptcy. Then if I wanted I could spread this out over one year maybe, by adding an additional $80 per month to my regular mortgage payment. She also said this is like a "late fee," which I disagreed with her calling it that, since as I told her, I've never been late on this bill.

My question, is this commonly done, that people have to pay a bank's legal fees when they file a claim against your bankruptcy estate? Then, though I have been paying each month by my due date since OldBank "signed off" I have yet to receive a "regular" statement from NewBank. I have received 2 statements with the amount of -0- due. That sure would be nice if it was real, but my mortgage will not finished until years from now.

Sorry to ramble, but should I insist on some sort of proof that I owe the $900 for legal fees? And also should I be concerned that I've never received "regular" statements from this new bank? I'm so afraid with all the horror stories I've read about banks these days.

[spidge]

This also happened to me with my mortgage holder, but it should be included in their claim on the BK and not on the invoice that is not a bill they send you. Also, it sounds like you filed while Oldbank had the loan and therefore included the fees within their claim. Newbank cannot add to the fees because they assumed the loan and its current status with the claim already accepted by the trustee. Now if you have not filed yet this could be legitimate.
Challenge them on this and seek your attorney's help to rectify. I would imagine they are in violation of some rule. If they would like to pursue it remind them that they will be held accountable for any fees you incur.

[forgotten]

They could have added the fee in with the claim that they filed, however, they can not bill you directly for this. Not only are they demanding payment from you, they are charging you fees, both of which are violating the automatic stay in the bankruptcy case. You should contact your attorney on this one.

[catleg]

Agreed with all of the above. They should be sanctioned for this behavior.

[justbroke]

My question, is this commonly done, that people have to pay a bank's legal fees when they file a claim against your bankruptcy estate?

Yes, absolutely done in Chapter 13s. When the bank files their Proof of Claim, it will include legal fees associated with the bankruptcy. It is generally about $900 in fees in Florida which includes preparing the Proof of Claim and attending one hearing.

Sorry to ramble, but should I insist on some sort of proof that I owe the $900 for legal fees? And also should I be concerned that I've never received "regular" statements from this new bank? I'm so afraid with all the horror stories I've read about banks these days.

I would speak with my attorney and ask about this. The "fee" should clearly be disclosed on the proof of claim filed in the Chapter 13.

[lillymarlene]

Hi, Thanks for the replies. According to my attorney, I am responsible for the bank's legal fees in this instance. However, he thinks that $900 is excessive and said he'd check their proof of claim for me.

[spidge]

Hi, Thanks for the replies. According to my attorney, I am responsible for the bank's legal fees in this instance. However, he thinks that $900 is excessive and said he'd check their proof of claim for me.

I am willing to bet the Trustee has guidelines on this subject and I bet the judges go with those recommendations.

Another way to look at this is that it does not matter anyway. Under CH13 you will pay your disposable income toward a percentage of your debts. So don't worry about it much unless your 100% payback. They may not see any of it.

[lillymarlene]

I just wanted to update this. I received a letter today from NewBank that though OldBank "has the right to pass their legal fees onto me, NewBank has chosen to waive those fees." Fantastic!! Every little bit helps and I guess sometimes it sure doesn't hurt to ask.