“You Know It When You See It”: The Ethics of Mortgage Fee Dual Tracking in Chapter 13

Abstract:

"Ed Boltz, the managing partner of the Law Offices of John T. Orcutt, and associate bankruptcy attorney, Ryan Srnik, posit that recent North Carolina bankruptcy decisions in In re Peach and In re Rogers transform technical rules about postpetition mortgage fees into robust consumer‑protection tools in chapter 13 practice. They explain that both cases condemn “dual‑booking” and inconsistent fee disclosures by mortgage servicers, hold that any fee assessed and noticed must be fully disclosed and actually sought through proper Rule 3002.1 procedures, and bar creditors from later collecting undisclosed or selectively disclosed amounts. Boltz and Srnik contend that these rulings protect plan feasibility, debtor decision‑making, and systemic confidence by insisting on accurate, complete, and final mortgage accounting throughout the case. Finally, they highlight the emerging ethical obligations of mortgage‑servicer counsel and chapter 13 trustees to investigate servicing records, identify noncompliant accounting, and navigate difficult choices when client practices have already created potential violations and future borrower claims."

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