I’m taking a few minutes break from some profound study of the exceptional educational material presented as part of Max Gardner’s Bankruptcy Boot Camp…..more on that later, but I’m gonna tell you the information contained in the material is mindblowing. Just one Law Review study he mentions caught my attention and I wanted to share it….
Here’s the deal….a law professor was hired by the National Conference of Bankruptcy Judges to review proofs of claims filed by the banksters in bankruptcy cases. I encourage you to read the entire law review article, but if you don’t have the stomach for it….here are a few of the lowlights…..
- This Article examines the actual behavior of mortgage companies in the consumer bankruptcy system. Using original data from 1,700 recent Chapter 13 bankruptcy cases, I conclude that mortgagees’ behavior significantly threatens bankruptcy’s purpose of helping families save their homes.
- Despite unambiguous federal rules designed to protect homeowners and ensure the integrity of the bankruptcy process, mortgage companies frequently fail to comply with the laws that govern bankruptcy claims.
- Fees and charges on bankruptcy claims often are identified poorly and sometimes do not appear to be legally permissible.
- On an aggregate level, mortgage creditors assert that bankrupt families owe them at least $1 billion more than the families who file bankruptcy believe they owe.
- Although infractions are frequent and irregularities are sometimes egregious, the bankruptcy system routinely processes mortgage claims that do not comply with legal procedures.
- The misbehavior and mistakes of mortgage servicers that this Article identifies in the bankruptcy data are not specific to the bankruptcy process. Indeed, the reliability of mortgage servicing may be worse for ordinary, nonbankrupt Americans. When these families face foreclosure, they lack the safeguards of the bankruptcy system””such as specific and uniform federal laws, bankruptcy trustees, specialized federal courts, and the representation of counsel””that are intended to ensure that mortgage servicers are com-plying with consumer-protection laws.
- This Article’s findings suggest that a flawed system of mortgage servicing is a key contributor to the current crisis in the American home-mortgage market.
Now as you consider those few little snippets, just consider that these problems are documented in the context of the supervision of federal bankruptcy judges, just what do you think is going on elsewhere?