Remdy against secured creditor for incorrect payoff demand?
Posted: Sun Jul 11, 2004 10:03 pm
Chapter 13 Debtor wanted to refinance real property. Court approved
Motion to refinance. Secured Creditor's payoff demand was several
thousands higer than its earlier filed proof of claim. Creditor
fails to timely cooperate on providing its supporting records and
when it finally does (a couple months later), records clearly show
creditor is applying both postpetition payments from debtor and
prepetition arrears from trustee to the prepetition debt and
continuing to charge late fees and interest as if there were no
bankruptcy. In addition creditor charging the debtor for continuing
foreclosure fees it is incurring postpetition (resetting foreclosure
date). Creditor then fails to correct demand when brought to its
attention and cannot even provide anyone to intellegently discuss
the issue. Creditor's staff clueless - BK unit refers to payoff
unit which refers back to BK unit. Creditor's counsel would only
refer me back to BK unit. In the meantime since the demand was so
high there was not enough money for the refinance to go though and
time ran out on the prosposed refinance offer.
Debtor lost ability to refinance and I spent significant time trying
to assist the client.
Debtor subsequently found new lender for larger loan and had to pay
additional fees (new appraisal,etc). Payoff demand again wrong, but
debtor needed to refinance because could not make Chapter 13 plan
payments and closed escrow.
Remedies against lender? Automatic Stay Violation? Action for
refund and demand attorney fees under the contract terms?
Thoughts appreciated.
Mark Jessee
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