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DS News November 2022

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68 [v] HSBC argued that the time period (180 days) had not yet run for HSBC to file its Rule 3002.1 claim relating to that tax advance and that the bankruptcy was dismissed before the period expired. [vi] HSBC also contended that Dewitt's reliance on HSBC's sworn response that Dewitt was current was unreasonable since she had received letters indicating HSBC intended to escrow for the past tax advance. Lastly, HSBC argued the bankruptcy court did not have the authority to disallow fees provided for under the mortgage regardless of whether a 3002.1 claim was filed. e court rejected all these arguments and stated it was "hardly amused" by HSBC's "excuse that it simply changed its mind." [vii] e court stated: "Rule 3002.1 is clear—creditors who intend to recover additional post-petition fees related to a … mortgage claim secured by the debtor's primary residence must timely disclose these fees." [viii] e court elaborated "that Rule 3002.1 exists to prevent unexpected deficiencies in residential mortgage payments when a chapter 13 case is completed and closed." [ix] e court explained that the bankruptcy provisions take into account the creditor's contractual rights while balancing those interests with the debtor's desire to escape the "pressure and discouragement of preexisting debt." [x] e court concluded that Dewitt was harmed by HSBC's failure to file a claim under 3002.1(c) and by its failure to file an accurate response to the Notice of Final Cure Payment as required by Rule 3002.1(g). Dewitt was "forced to defend a state court foreclosure action and to reopen her bankruptcy case to assert her rights." [xi] e court held Dewitt was entitled to sanctions against HSBC for its violations of 3002.1 and reserved jurisdiction to determine the type and amount of the sanctions award.[xii] It remains to be seen whether Dewitt will be entitled to damages for her counterclaims filed in the state court foreclosure proceedings. Stay tuned. Joel Jensen is a Bankruptcy Attorney at Diaz Anselmo & Associates P.A. in Covington, Kentucky. For a period spanning two decades, Jensen has concentrated his practice in the representation of banks, lenders, and mortgage servicers in the areas of bankruptcy and bankruptcy litigation in cases arising under Chapters 7, 11, 12, and 13 of the Bankruptcy Code. He is admitted in all Federal Courts in Ohio, Kentucky, and Indiana, as well as the United States Court of Appeals for the Sixth Circuit. He is licensed to practice law in Ohio and Kentucky. He has provided counsel and advice to mortgage lenders and servicers for many years concerning the many changes to bankruptcy statutes and rules that have occurred. He has served as a judicial law clerk for a Federal District Judge in the Southern District of Ohio. Jensen is a life member of the Judicial Conference of the United States Court of Appeals for the Sixth Circuit. He has a wide background of legal experience that he can bring to bear to solve legal problems and assist clients to comply with the law. [i] HSBC Bank USA, NA, as Indenture Trustee for the registered holders of the Renaissance Home Equity Loan Asset-Backed Certificates, Series 2005-1. [ii] DeWitt failed to comply with the portion of her plan which required her to stay current with property taxes. During the bankruptcy proceedings DeWitt failed to make three tax payments which HSBC ending up advancing on her behalf. HSBC made the first advance in August 2014 for $6,097.95, the second advance in August 2015 for $1,655.63, and the third advance in April 2017 for $4,155.91. DeWitt, at 2. Future references to and quotations from DeWitt are to this citation until indicated otherwise. [iii] DeWitt, at 2-3. Future references to and quotations from DeWitt are to this citation until indicated otherwise. [iv] DeWitt, at 6-7. Future references to and quotations from DeWitt are to this citation until indicated otherwise. [v] DeWitt, at 3. HSBC did not explain why it did not seek reimbursement for the first, and largest tax advance. [vi] DeWitt, at 4. Future references to and quotations from DeWitt are to this citation until indicated otherwise. [vii] DeWitt, at 7. [viii] DeWitt, at 7. [ix] DeWitt, at 5. Future references to and quotations from DeWitt are to this citation until indicated otherwise. [x] DeWitt, at 1. [xi] DeWitt, at 8. [xii] DeWitt, at 12. "Rule 3002.1 is clear—creditors who intend to recover additional post- petition fees related to a … mortgage claim secured by the debtor's primary residence must timely disclose these fees." By: Joel Jensen Quick Take

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