Foreclosure Defense Florida

WOW, Misbehavior and Mistake in Bankruptcy Mortgage Claims!

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?

Texas Law Review Article

Review of Texas Law Review Aritcle


  • debi p says:

    The fraud is so sytstemic there’s no where it is not prevalent. The whole point of bankruptcy is to HELP the homeowner with debt and clear their slate to start fresh. When fraud is committed in this arena it is definitely predatory at very least. Matt, I have the uptmost respect for u and all u do and know. I can’t wait to see the culprits that come from this arena. Where does the dishonesty end? Are our courts corrupted to a point of no return? When they prey on the bankrupted–u know there’s no intention of bring forth the truth. The only saving grace—they make mistakes and lots of them. How sick is that when we have to rely on the opposing counsel to be inderpaid and over worked and too young to see the truth. Bless u Matt. Debi P. Ps I just referred a fraud case to u from sarasota I’m praying u have time to defend his fraudulent mortgage. Who else is there?? May God allways bless u and energize u and keep u safe from harm. We need u and appreciate u more than u shall ever know.

  • Evan says:

    way to go matt! i went to max’s a few months back. it also blew my mind!

    thanks as always for all the hard work!

  • risktaker53 says:

    Twelve years into our mortgage, we filed chapter 13 (I’m guessing 10-12 years ago) to save our home, and we paid every dime the bank and a few other creditors said we owed…in fact, we paid a lot more than we thought we owed…and when our mortgage balance only dropped by less than 1/4 of the amount we actually paid, we wondered why, but we figured that surely the court and the bank were honest about these things. Now I have my doubts…but too late…we lost our house to foreclosure last June…23 years into a 30 year mortgage with no refi or 2nd mortgage…when I think of the hundreds of thousands of dollars I gave them for a house we thought cost just over $100,000…it makes me sick…and to now have nothing for all our effort…makes me sicker. Some guy came in and paid pennies on the dollar and took all of my equity. How do they sleep at night? …Very comfortably, I’m sure…they have no concience.

  • leapfrog says:

    Great article & thanks for posting. As an aside,

    I’d like to know how a bankrupt originator, while in active BK and subject to trustee supervision, could “transfer” loans (via MERS) WITHOUT approval from the trustee?

    I’m familiar with BK rules, and I know if I transferred any property while the trustee was actively involved in my case, I’d likely end up heavily fined or in jail.

    • they cannot under bankruptcy rules…that is one of the most basic rules the united states bankruptcy judges and the us trustees are asking….what the lenders say is the loan was transferred long ago, the assignment is just a record of this prior transfer…that’s nonsense, but that’s how they respond.

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