If you are behind on your mortgage or if you are in a Chapter 13 case to "catch-up" your mortgage, stay tuned! Changes in the Bankruptcy Rules require that certain Notices be provided by a lender to a homeowner in a Chapter 13 case who is "catching-up" past due mortgage payments. The goal is to help you answer that age-old question: "WHAT'S GOING ON WITH MY MORTGAGE?"
Why is this so important?
Because before these new rules were implemented, after your case was filed and during your case, fees, charges and expenses such as "inspection fees", "appraisals","broker price opinions", "late fees" and "attorney's fees" could be added to your account and simply accumulate during your case. After your case was completed and you thought your mortgage had been brought current, these fees, charges and expenses could show up in your mail in the form of a "Default Letter" claiming you were "behind" on your mortgage and threaten the "fresh start" and "peace of mind" you had expected to enjoy when your Chapter 13 case was completed!
The key concept driving the new Notice requirements is "transparency". The goal is to make any charges posted against your mortgage account by your lender more "open", "upfront" and "transparent". The new rules allow you and your Chapter 13 attorney to monitor and review any Notice of a Payment Change such as a change to an interest rate or to an escrow account or any Notice of Post-Petition Fees, Charges or Expenses posted against your account. Now, with these Notices required to be provided to you, and to your attorney and to your Chapter 13 Trustee, you and your attorney can review any payment changes or fees, charges or expenses which are posted against your account. If they are incorrect, they can be disputed before your Chapter 13 is completed. If they are correct, you have an opportunity to deal with them "early on" and not at the end of your case. This "openness" is designed to protect your "fresh start" as you complete your Chapter 13 case by ensuring that you have had a full opportunity to be made aware of any fees, charges or expenses assessed by your lender during the case.
By reviewing any notices you receive from your lender with your attorney, you have a new tool to ensure that you enjoy your fresh start.