Legal Question in Bankruptcy in California

Re: morgage company overcharging in sale of house

Under bankruptcy law there would be no late charges on your payments after the reorganization was filed as long as you made those payments timely. In addition, under California law, even if you owe a late charge for a prior month but you pay that payment in the grace period for the next months payment they can't charge a late fee for that 2nd month even though you actually pay it a month late. (yes, this is confusing) The idea of the law is that if you get behind at all they cannot add a late fee for every month, only the one month that you got behind even though each monthly payment after that was credited to the prior month. The civil code section on this is 2954.4 (b) which reads in relevant part: "For the purposes of determining whether late charges may be imposed,any payment tendered by the borrower shall be applied by the lender to the most recent installment due." You should take this information to your attorney and, if necessary he can file a adversary complaint in bankruptcy court to get the court to determine the amount you really owe since the amount does NOT MATCH their claim. Your total payoff should be the amount that they claimed in their proof of claim less the amount the trustee paid down on the principal and pre-filing arrears and less the reduction in principal from your ongoing postfiling direct payments to the mortgage company. You may get them to change their demand once you show them that the law does not allow those late fees.

You can check my bankruptcy law firm out at www.ca-bankruptcy-attorneys.com

Re: morgage company overcharging in sale of house

Sorry, but not really sure.