What Do Phone Sex & Mortgage Servicing Have in Common?

Question: What do phone sex and mortgage servicing have in common?

Answer: They both cost $9.99 a minute.

This isn't a joke. It's a real-life example of the difficulties that consumers sometimes face in working with their mortgage servicers. As part of a study of mortgage claims that I'm conducting, I came across an objection to a mortgage claim where the debtor asked for the court's help to avoid paying $9.99 a minute to talk with his mortgage servicer. The mortgage company had filed SIX duplicate claims, each for an identical amount. These claims were not marked as amended claims, so the debtor wanted to ensure that he only was on the hook for his mortgage debt one time. Since these claims were obviously mistakes, the question is why didn't the debtor just contact the creditor and tell them--"Hey, stop spitting out these claims and withdraw the extras and let's just get on with this bankruptcy." In fact, the debtor's attorney and the Chapter 13 trustee both tried to do just that. They called up the creditor at the listed phone number, but were directed to call another number if they needed actual assistance. The hitch--that other number required them to pay $9.99 A MINUTE. Frustrated, the debtor's attorney went the formal route and filed a claims objection, which I've put below the jump.(Click on it to see it big enough to read clearly; you may need to adjust to 50% in the picture viewer to see the bottom). 

I must say that I thought that I had already seen it all in my review of 1700 recent mortgage claims. I'd become hardened to $50 "fax" fees; $75 "payoff statement" fees; and the $500 "bankruptcy" fees as part of the costs of mortgage default. But the $9.99 per minute was a new one, even for me.  Of course, this situation could be a mistake, a typo on a form. Or the mortgage servicer could have identified a profitable revenue stream by charging consumers for information. After all, a consumer can't get rid of their mortgage servicer for poor customer service; the servicing company works for the mortgagee. Regardless of intent, the effect is the same: it is harder for a debtor to reach out to a mortgage creditor, and thus harder for a debtor to reach an agreement. At $9.99 per minute, talking with your mortgage servicer is an expensive option.

Comments

[OkieLawyer]

Sanctions should be allowed for this practice -- especially the $9.99 per minute phone charge. That is outrageous.

[lmclark]

I wonder if this fee violates the stay. And isn't this a much bigger problem in chapter 13 cases in which property of the estate is revested in the debtor upon confirmation.

Gretchen Morgenstern has been writing a lot on these issues. I wonder if she might be interested in this little vignette.

[bill]

Good lord. That's greed in a nutshell.

I think that lmclarks comment re:Morgenstern is a good one. Sounds like the kind of thing she writes about, frequently.

[dales]

We have a sub-prime loamn in NYS which is crippling our family. It has increased from 2500 to 3700 in lss than two years. My wife is on the mortgage, I am not but we are on the deed togetrher.
The question... Is the morgage company violating any law by discussing and negotiating with me the mortgage? The original company went bankrupt (new Century) and was taken over. I discussed all the mortgage info w them beofre. Now that a new company has taken over they refuse to discuss the acount with me . They have indicated they will send a thrid party authorization form when signed by my wife , I will be able to speak with them.
Did the companies violate my wifes right to privacy , and if so where in the law does it say
Please help.. we are on the verge of collapse