Overview

Debtor and Bankruptcy Trustee payments made during the bankruptcy process are atypical at times – the amount and timeline may differ month to month. Add mortgage servicing transfers into the mix and the problem of keeping up with payment processing is exacerbated. As a result, these payments are often lost, returned, or misapplied and then returned to the court. When the bankruptcy is dismissed or closed, these excess funds are transferred from the trustee to an account managed by the US Government where the funds sit.

The process used to reconcile these missing payments is typically to charge off the shortfall as the loan changes hands or show the payment as never having been made. Both solutions create a discrepancy between the servicer and bankruptcy courts loan balance which represents a compliance issue and stands to harm the borrower, investor or both.

The scale of this problem is staggering with more than $400M sitting in these US Government accounts. If you’re a note holder, why not let bk hub help you recover these funds?

PS: It cost you nothing unless we’re successful!