IN RE ADAMS
In re: CRAIG L. ADAMS and MONICA L. ADAMS, Debtors.
Case No. 04-003875-5-SWH.
United States Bankruptcy Court, E.D. North Carolina, Raleigh Division.
July 7, 2010.
ORDER FINDING OCWEN LOAN SERVICING LLC IN CONTEMPT OF THE DISCHARGE INJUNCTION AND THE COURT’S ORDER OF MAY 23, 2008 AND AWARDING DAMAGES AND SANCTIONS
STEPHANI W. HUMRICKHO– USE, Bankruptcy Judge
The matter before the court is the chapter 13 debtors’ motion for Ocwen Loan Servicing LLC (“Ocwen”) to show cause why it should not be held in contempt for violating the terms of an order entered in this court on May 23, 2008, which 1) declared that all mortgage payments due from the debtors to Ocwen were current as of that date and 2) enjoined any action to collect sums discharged. The motion for show cause was filed on September 12, 2008, and the hearing on that motion was continued multiple times at the request of the parties. A hearing ultimately took place in Raleigh, North Carolina, on May 26, 2010. At the conclusion of the hearing, the court announced that it had found Ocwen in contempt of the May 23, 2008 order, and took the damages issues under advisement. The court requested counsel to provide it with the parties’ respective damages calculations, and both parties have done so.
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The debtors filed a petition under chapter 13 on October 26, 2004. Ocwen, the debtors’ mortgage servicer, was included on their schedules as a secured creditor holding a first lien on the debtors’ residence. The debtors’ discharge was entered on April 25, 2008. On April 29, 2008, the debtors filed a motion seeking a declaration that all payments due from the debtors to Ocwen on their residential mortgage were current (the “Mortgage Declaration Motion”). Ocwen was properly served with the Mortgage Declaration Motion, but did not respond.[ 1 ] The May 23, 2008 order entered as a result of that motion declared the Ocwen indebtedness current and also provides:
Ordered that in the event the holder of the mortgage, the current servicer or any subsequent assignee or holder of the mortgage debt attempts to collect any of these discharged principal payments, interest, fees or expenses, such action shall be deemed to be a willful violation of the discharge injunction and contempt of the orders of this Court; and that such action shall give the right to the Debtors to pursue a proceeding before this Court for contempt and appropriate sanctions and such other state and federal statutory remedies as may be available to the Debtors and that this Court specifically retain jurisdiction over such claim or claims.
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Compensatory and Punitive Damages
Accordingly, no later than fourteen (14) days from the date of this order, Ocwen Loan Servicing, LLC shall pay FIFTEEN HUNDRED DOLLARS ($1500) in attorney’s fees and expenses to DOUG WICKHAM, counsel for the debtors, P.O. Box 527, Raleigh, NC, 27602-0527.
No later than fourteen (14) days from the date of this order, Ocwen Loan Servicing, LLC shall pay SEVEN HUNDRED FIFTY DOLLARS ($750) in attorney’s fees and expenses to the standing chapter 13 trustee in this case, JOHN F. LOGAN, P.O. Box 61039, Raleigh, NC, 276611-039.
No later than fourteen (14) days from the date of this order, Ocwen Loan Servicing, LLC shall pay TWO THOUSAND FIVE HUNDRED DOLLARS ($2,500) in compensatory damages and expenses to CRAIG L. AND MONICA L. ADAMS, 2150 Highway 97, Zebulon, NC 27597.
No later than fourteen (14) days from the date of this order, Ocwen Loan Servicing, LLC shall pay SIXTY-SIX THOUSAND THREE HUNDRED DOLLARS ($66,300), as a punitive sanction, to CRAIG L. AND MONICA L. ADAMS, 2150 Highway 97, Zebulon, NC 27597.
No later than fourteen (14) days from the date of this order, Ocwen Loan Servicing, LLC shall provide proof to the debtors’ counsel, the trustee, and to the court that the following actions have been taken:
1) Ocwen has reported to all three major credit reporting companies that the debtors’ loan with Ocwen was in bankruptcy from the debtors’ petition date through the date of discharge; was current from the date of discharge; and remains current as of the date of this order;
2) Ocwen has adjusted its records to reflect that the debtors have a principal balance remaining, as of July 1, 2010, of $65,373.12, to be paid at 6% interest, fixed rate, over the remaining life of the loan.
(down from $77,360 with a 10.9% rate)
In the event that Ocwen fails to comply with the payment of any of the damages awarded herein within fourteen (14) days of the date of this order, said sum shall be applied as a setoff against the amount owing to Ocwen and secured by the mortgage. Upon failure of Ocwen to comply with such payments, the debtors will supply the court with a verified statement attesting to such failure and the court will provide the debtors with an order to be recorded in the Wake County Register of Deeds Office setting forth the set off and the new balance.
For each day after the expiration of fourteen (14) days after the date of entry of this order, if any provision of this court’s order remains unsatisfied, additional punitive damages will be assessed against Ocwen in the amount of $100 per day, payable to the Clerk of Court, 300 Fayetteville Street, Suite 209, P.O. Box 1441, Raleigh, NC 27602, until all terms of this order are satisfied.
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Check out the entire order below…