Category Archives: Bankruptcy

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Do Servicers Have to Monitor Whether a Successor in Interest is in Bankruptcy? CFPB’s FAQ Suggests the Answer is “Yes”

As the effective date for the CFPB’s successor in interest and bankruptcy billing statement requirements quickly approaches, one question we’ve heard multiple times is whether a mortgage servicer is required to know when a confirmed successor in interest is in bankruptcy. The question stems from upcoming provisions in Regulations X and Z that will collectively … Continue Reading

CFPB Issues Implementation Guidance for Mortgage Servicing Rule Amendments

On March 29, 2018, the Consumer Financial Protection Bureau (CFPB) released two important implementation tools that may help mortgage servicers ensure compliance with recent amendments to the mortgage servicing rules in Regulations X and Z. This release comes shortly after the CFPB published a set of Frequently Asked Questions that primarily addressed issues related to the … Continue Reading

CFPB Makes Last-Minute Changes to 2016 Mortgage Servicing Final Rule

On October 4, 2017, the CFPB released an interim final rule and a proposed rule to amend certain provisions of its 2016 Mortgage Servicing Final Rule. While the changes will not drastically change the 2016 Mortgage Servicing Final Rule, it is nevertheless important for mortgage servicers to synthesize the information and adjust implementation efforts as the effective … Continue Reading

Bitcoin and Bankruptcy: What You Need to Know about the Value of Bitcoin and Other Cryptocurrencies in Bankruptcy

It is hard to peruse the internet or even mainstream media outlets without hearing about bitcoin. What is this ubiquitous bitcoin? It depends on whom you ask. A CNN Money articled defined bitcoin as “a new currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto.” The IRS has recently … Continue Reading

Judicial Estoppel Defense in Bankruptcy Claims Likely to Get More Difficult

A recent decision from the Court of Appeals for the Eleventh Circuit has impaired a valuable defense for early dismissal or settlement with bankrupt plaintiffs. This decision will affect strategy for mortgage originators, servicers, and other financial services companies that face a high volume of claims from bankrupt consumers. On September 18, 2017, the Eleventh … Continue Reading

Out of Time, Not Out of Luck: Supreme Court holds POCs for Time-Barred Debt are OK under FDCPA

In a win for debt buyers and servicers, the Supreme Court held in Midland Funding, LLC. v. Johnson  that the filing of a proof of claim in a bankruptcy case for obviously time-barred debt is not false, deceptive, misleading, unfair, or unconscionable within the meaning of the Fair Debt Collections Practices Act (FDCPA). The Decision … Continue Reading

A Bankruptcy Discharge Makes a Face-to-Face Meeting an Act in Futility

Just last fall, we wrote about the Eleventh Circuit’s decision in In re Failla, Case No., in our article, “The Eleventh Circuit has spoken: Debtors who surrender property must get out of the creditor’s way.” Now, it appears that the discharge of a debtor’s mortgage loan in bankruptcy has other implications as well, including eliminating … Continue Reading

The Eleventh Circuit has spoken: “Debtors who surrender property must get out of the creditor’s way”

In recent years, there has been a hotbed of litigation across the nation, particularly in Florida state and bankruptcy courts, regarding a debtor’s ability to contest a secured creditor’s foreclosure notwithstanding the debtor’s previous “surrender” of the subject collateral in bankruptcy. The issue ultimately made its way to the Eleventh Circuit and, much to the … Continue Reading

Chapter 7 Debtors Cannot Strip Off Junior Liens on Underwater Home Loans, United States Supreme Court Rules

This morning, the United States Supreme Court ruled that debtors in Chapter 7 bankruptcy cases cannot “strip off,” or completely void, junior mortgages that—based on the value of the property and the amount of claims secured by senior mortgages—are completely underwater. This ruling eliminates a potential means for Chapter 7 debtors to maximize the relief … Continue Reading

Seventh Circuit Says Secured Creditors Must File Proof of Claim Within Ninety Days of Meeting of Creditors

Timely proof of claim filings by secured creditors have “been a thorn in the side of many Chapter 13 cases involving secured creditors,” according to Judge Wood in In re Pajian. However, a recent Seventh Circuit decision may cause the industry to revise their current process for proof of claim filings. Bankruptcy Rule 3002(c) requires … Continue Reading
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