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Announcement Regarding Mortgage-Related Practice Before the Court

Thu, 12/27/2007 - 4:00am

The Court recently formed a working group of attorneys to study various aspects of mortgage-related practice before the Court. One aspect reviewed by the group was the issue of correct accounting of a debtor's post petition mortgage payments. With increasing frequency, the Court has observed that errors in accounting have resulted in continuances and numerous orders reinstating the automatic stay.

As a result of their study, the working group has recommended that the current forms required by SC LBR 4001-1 be more strictly enforced. In particular, the Certification of Facts form requires the movant to list or attach a list of all post petition payments received directly from the debtor, clearly showing the date the payment was received, the amount of the payment, and the month and year for which each payment was applied. By footnote, the Certification provides that this requirement may not be met by the attachment of a payment history generated by the movant. The purpose of this provision is to require the certifying party to set forth a clear accounting of a debtor's complete post petition payment history and to avoid reliance on creditor generated ledger, which may be vague or difficult to interpret. A recent review of the Certification of Facts in matters that are currently pending before the Court revealed that many movants do not comply with this requirement and some movants even alter the Certification of Facts form by eliminating this or other provisions.

Accordingly, the Court has accepted the recommendations of the working group and hereby advises the members of the bankruptcy bar that the Court may deny, without a hearing, motions that do not comply with SC LBR 4001-1.