On May 1, 2013, U.S. Bankruptcy Judge Letitia Paul agreed with our objection to a mortgage company trying to charge our clients a $50 fee for filing a Notice of Payment Change due to a change in their escrow account. In re Samuel and Dorothy Boyd, Case No. 12-80400, in the U.S. Bankruptcy Court for the Southern District of Texas, Galveston Division. Judge Paul also reduced the mortgage company attorney fees for filing an Objection to Confirmation, from $400 to $200.

Saving the $250 in fees doesn't sound like it makes much of a difference, until you realize that she ruled that the $50 charge is just not going to be a recoverable cost in chapter 13 cases, because mortgage companies are already required to provide customers with this information, whether they are in bankruptcy or not. The Court stated:

...Debtors object to the $50 charge for preparing the Fee Notice as it is akin to providing an annual escrow statement. Debtors are correct that no fee should be charged to a debtor for filing the form providing Notice as a creditor has a duty under nonbankruptcy law to inform a debtor of amounts that come due under a mortgage.  See In re Carr, 468 B.R. 806 (Bankr. E.D.Va., 2012). The court disallows the $50 charge for preparing the Notice.

I figure if the mortgage companies can't charge my clients the $50 fee for reviewing the Notice of Payment Change, that potentially saves my clients a total of more than $15,000 per year. That was well worth the effort in bringing the objection and going to court.

J Thomas Black
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Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization
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