“All a home loan creditor needs to file a proof of claim is an amount due, a payment record, copies of relevant writings, an escrow account report at the date of the petition, and a reliable calculation of the arrearages that may be due.”
“It’s not that hard,” Bankruptcy Judge Robert E. Nugent of Wichita, Kansas, said in a March 23 opinion.
Judge Nugent was dealing with a mortgage lender who committed the following sins: The lender (1) filed a proof of claim asserting that the escrow shortage was $4,383 when it was admittedly $369; (2) ignored the debtor’s informal attempts at correcting the proof of claim for more than 200 days; (3) forced the debtor to file a formal claim objection; (4) ignored the debtor’s formal discovery requests; and (4) put the debtor, the trustee and the court “to unnecessary expense, effort, and frustration,” the judge said.
The lender compounded an “innocent mistake” in calculating the escrow shortage by “its willful refusal to cooperate. That demands a sanction,” Judge Nugent said.
As a sanction under Bankruptcy Rule 3001(c)(2)(D), Judge Nugent directed the lender to pay the debtor’s counsel fees of almost $6,000, which he found “reasonable.”
Judge Nugent said that creditors “need to know that courts take filing incorrect proofs of claim seriously.” Recognizing that the sanction “exceeds the amount in controversy,” the judge reminded the mortgage lender “that had it paid any attention to this matter . . . , [the debtor] would not have had to incur this expense.”
Judge Nugent appeared to lament how Rule 3001(c)(2)(D) has been interpreted to preclude courts from disallowing an otherwise allowable claim as a sanction for violation of the rule.