More on Mortgage Company Abuses

04 Apr More on Mortgage Company Abuses

Bankruptcy Law Network member Kurt O’Keefe wrote an interesting post on this blog about mortgage company abuses. Kurt referenced a story in the Atlanta newspaper about the Atchleys, a Waleska, Georgia couple who filed Chapter 13, and thereafter found themselves subject to multiple motions for relief from stay based on post petition payment delinquency filed by Countrywide.

In each case, the Atchleys were able to prove that they were not delinquent and in each case Countrywide withdrew its motion. Eventually, the Atchleys became so fed up with the stress of dealing with Countrywide, that they sold their home at a discount and moved into an apartment.

This story was also picked up by the New York Times on March 30, 2008 as part of a investigative report entitled Foreclosure Machine Thrives of Woes. Bankruptcy Law Network member Pamela Stewart was quoted in the New York Times piece, which discusses the assembly line mentality of the multi-state foreclosure firms that handle hundreds of foreclosures each month in big cities.

As my bankruptcy practice is in Atlanta, I know the attorneys involved in the Atchley case and I have reviewed both the docket in this case as well as the complaint filed against Countrywide by the United States Trustee for alleged abuse of the bankruptcy process. The docket report shows multiple motions for relief from stay by counsel for the lender, and thereafter a withdrawal of the motion.

I think that both the Atlanta newspaper and the New York Times failed to give their readers a sense of the stress that debtors feel when mortgage companies file motions like this. For most debtors, Chapter 13 is an absolute last resort and debtors are aware that bankruptcy is their last hope to save their home, keep their kids in a stable school environment and avoid turning their lives upside down. Now, despite making their payments and struggling to make their Chapter 13 work, they have the mortgage company and its counsel filing repeated frivolous motions that could put them on the street.

No doubt, their lawyer knew that these motions for relief had no basis but imagine how the debtors must have felt. This is why the U.S. Trustee filed a strongly worded complaint against Countrywide (a copy of this complaint is posted on a local Atlanta bankruptcy firm’s web site), and I hope that the bankruptcy judge in this case sends a message to Countrywide, its counsel and other lenders who do business this way.

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Jonathan Ginsberg, Esq.

I represent individuals in Chapter 7 and Chapter 13 cases filed in the Northern District of Georgia, which includes Atlanta, Newnan, Gainesville and Rome. I publish several informative web sites, including https://www.atlanta-bankruptcy.com and an Atlanta bankruptcy blog, https://www.thebklawyer.com/thebkblog. Please mention Bankruptcy Law Network when you call.
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