This is a story about how Bank of America violated the bankruptcy discharge, hacking off Gus and Nikoleta, and me. (I’ve changed the names of Gus and Nikoleta–all the rest of this is true.) And then hit Gus and Nikki for a “foreclosure fee” while they were current. And then did it again.
Gus and Nikoleta came to see me in 2009.
Gus and Nikki had been through tough times and they were behind on the mortgages. They had a first and a second, both with Bank of America. They were fifteen thousand behind on their first mortgage and Bank of American was about to foreclose.
We put them into a chapter 13 bankruptcy. The had five years to pay the bankruptcy court fifty thousand dollars–catching up the first mortgage, knocking the second off the house, and paying off their car, and a little something to the rest of their creditors. (I explain how that works, here.)
In early 2011, Gus lost his job–he used his thirty five thousand dollars severance to pay off the chapter 13 early! (Pretty gutsy–he was hopeful he could get work again soon.)
After the Chapter 13 bankruptcy was paid and closed in May 2011, Bank of America misbehaved. Calling Gus and Nikki day and night, trying to collect that second mortgage that had been knocked off by the Chapter 13.
Gus tried to handle this on his own. He called Bank of America–and over five months talked to Denise, Eddie, Shauna and Tanisha. Each of them claimed in different ways that he still owed the second mortgage. He faxed them five times and sent certified mail. They kept leaving voice mails and kept billing him.
And in July 2011, they also put a $450 “foreclosure” fee on his first mortgage, which was, of course, current.
Finally, in April 2012, I filed papers to bring the bank in front of the bankruptcy judge. (I was way slower than I should have been.) That started months of back and forth between me and the Bank of America lawyer. We agreed quickly that they owed Gus and Nikki some money for their aggravation. And they owed legal fees, because the bank refused to shape up until I got involved.
We agreed, after several months, what the bank owed us–but then they said they wouldn’t pay unless I promised I wouldn’t do a blog on this whole mess.
Well, I hadn’t blogged on it–my blog is mostly helpful advice, not courtroom drama. But it’s a legal ethics violation for a lawyer to promise to keep information from the public. (That sells out the rights of people who might be in the same boat.)
Finally, the bank agreed to drop that demand, and we signed a settlement.
After bankruptcy, Bank of America charged Gus and Nikki a $450 foreclosure fee, even though they were current. Less than a year later, they did it again.
As soon as the settlement was signed, a new $450 foreclosure fee hit Gus’s monthly bill! The bill said he owed $450 for foreclosure fees for January 9, 2013, when he was current!
What? Having spent months fighting Bank of America on his own, this time Gus called his lawyer, me, right away. He told me to get on it!
I called up their lawyer the next day and asked what the heck was going on. He assured me the Bank had a right to the $450 and he’d let me know what right as soon as he found out.
Then he called back and said, complain all you want to the bankruptcy court, it will do no good. Since the bankruptcy is over, the bankruptcy court has nothing to say.
Well, I did complain to the bankruptcy court–I’d been reasonable, now they were pushing us around.
In court last month, their lawyer said this was the same $450 foreclosure fee we had complained about the year before. We had no business, he said, complaining a second time.
When the Judge asked a follow up question, the lawyer gave a different excuse. We agree this is a mistake, the lawyer said, it’s in our computer, we can’t figure out how to stop it.
That was four different “excuses” in the space of four weeks.
Excuse one: It’s right–Gus and Nikki owe the $450
Excuse two: It’s not part of the bankruptcy; you can’t complain to the bankruptcy judge
Excuse three: This is the same $450 you complained about before; it’s unfair to complain again
Excuse four: It’s a mistake; we’re trying to fix it
The bankruptcy judge told the lawyer to come for trial on May 23 with a witness from the bank who knows and can explain what is going on. Or, you can settle with Mr. Weed and his client. (I thought that was a hint that the bank should settle, but so far they haven’t.)
It will be interesting to see what their witness says at the trial May 23. I’m looking forward to it.
(I should say their lawyer may right about one thing–the bankruptcy court has jurisdiction if this foreclosure fee is really a foreclosure fee. Because the bankruptcy stopped the foreclosure and caught the mortgage up. But suppose they say, “Oh that has nothing to do with the foreclosure back in 2009. This is our New Year’s Special no-reason-at-all-fee. We just call it a foreclosure fee.”
If it is a no-reason-at-all fee, then maybe the bankruptcy court does not have jurisdiction. But it will sure be fun to hear them explain their no-reason-at-all fee to the judge.
And I’ll order a transcript. )
PS–Here’s the news! The judge slammed them $4100.00. Five hundred for Gus for the time lost from work to have to fight this. And thirty six hundred for me for over ten hours of lawyer time for having to make this fight. When it first came up I had told them “just fix it–and send $750.” That was $375 for one hour for me; and $375 for Gus for the trouble. They decided to fight and got what they deserved. (I’m guessing they spent at least three thousand on their own lawyer, too.)