Peggy C Manis
APPEARANCES:
| Steven C. Frazier, Esq. | Kimberly Cambron, Esq. | Debra L. Miller, Esq. |
| Post Office Box 1412 | 13010 Morris Road, Ste 450 | Post Office Box 59030 |
| Kingsport, TN 37662 | Alpharetta, GA 30004 | Knoxville, TN 37950 |
| Attorney for Debtor | Attorney for Mortgage Assets Management, LLC | Chapter 13 Trustee |
Rachel Ralston Mancl, United States Bankruptcy Judge. The central question before the court is whether—prior to the recent amendment to
I. The Factual and Procedural Background
Debtor Peggy Manis filed the petition commencing this Chapter 13 case on December 7, 2021. In Part 3.1 of the debtor’s proposed plan, she listed a claim of PHH Mortgage secured by her principal residence with an arrearage of $4,108.75 to be cured by monthly payments of $75 from the Chapter 13 trustee. Attorney Holly Knight filed an objection to the plan on behalf of Cascade Funding Mortgage Trust HB5. The objection was resolved by an agreed modification of plan signed by Ms. Knight, the debtor’s attorney, and the Chapter 13 trustee. The modification corrected the amount of the arrearage to $4,138.75, replaced the name “PHH Mortgage” with “Cascade Funding Mortgage Trust HB5 serviced by PHH Mortgage,” and increased the amount of the monthly payment to $120 to cure the arrearage over the life of the 36-month plan. Debtor’s plan as modified was confirmed by an order entered February 23, 2022.
“PHH Mortgage Services” filed a proof of claim on behalf of Cascade in the amount of $134,392.32 on February 15, 2022, listing $4,138.75 as being the “[a]mount necessary to cure any default as of the date of the petition” (the “Arrearage“). The amount of the Arrearage listed in the proof of claim matches that listed in the agreed plan modification. Attached to the proof of claim is an “Adjustable Rate Note (Home Equity Conversion)” and an “Adjustable Rate Home Equity Conversion Deed of Trust,” each carrying the legend: “This is a Home Equity Conversion Mortgage Loan pursuant to Tennessee Code Annotated, Title 47, Chapter 30.” Both documents also refer to a “Home Equity Conversion Loan Agreement” that was not attached to the proof of claim. The shorthand parentheticals used in the documents for the “Note,” the “Security Instrument,” and the “Loan Agreement,” respectively, will also be used in this opinion.
The Note and Security Instrument evidence that on June 22, 2007, the debtor conveyed her residence at 429 Easley Drive in Kingsport, Tennessee, in trust to secure a loan in a principal amount of up to $225,000 due and payable on February 2, 2095. No monthly loan payments are made under the Reverse Mortgage, but the debtor is required to pay annual property taxes and hazard insurance premiums for the residence during the term of the loan. Assignments attached to the proof of claim show the Reverse Mortgage was transferred to three other entities before it was acquired by Cascade on February 3, 2022. Three reports prepared by PHH Mortgage Services as of the date of the bankruptcy filing on December 7, 2021, were also attached to the proof of claim.2 The reports are titled “Internal Payoff Statement,” “Loan Balance History,” and “Total Amount Due for Reinstatement.” The Internal Payoff Statement provides a breakdown of the claim in categories for Principal Advances, Corporate Advances, Interest, Mortgage Insurance Premiums, and Servicing Fees. Each category is itemized in the Loan Balance History. The Total Amount Due for Reinstatement, reproduced in the appendix in Table 1, is the Arrearage which is comprised of a Property Charges Balance of $3,710.03 and Hazard Insurance of $478.72. No objection was made to the proof of claim, and the trustee commenced paying the Arrearage on March 15, 2022. The Arrearage payments of $120 per month were the only amounts listed as payable to the holder of the Reverse Mortgage under the debtor’s Chapter 13 plan.
The hearing on the motion for relief from stay was first set for August 13, 2024, then continued by an agreed order to September 10, 2024, and then continued again by announcements on four other occasions until January 7, 2025, when the Chapter 13 trustee informed the court that the motion was resolved. Neither the debtor’s attorney nor Mortgage Assets’ attorney appeared that day. The trustee announced that the parties had agreed that expenditures for force-placed insurance of $8,311 had been incurred, which charges the debtor would repay by extending her 36-month plan to 60 months.3 The trustee stated that the agreed order so providing “is written and is at the creditor now to be approved,” and would be submitted within 14 days. After 14 days passed, the clerk of court asked both Mr. Nave and the debtor’s attorney to tender the agreed order.
During the interval between the filing and denial of the motion for relief, the Chapter 13 trustee made the final payment to cure the Arrearage and the debtor completed her 36-month Chapter 13 plan. Accordingly, on February 25, 2025, the Chapter 13 trustee filed a Notice of Final Cure Payment pursuant to
On April 18, 2025, the debtor filed a motion pursuant to
The preliminary hearing on the debtor’s
- The court must determine if
Bankruptcy Rule 3002.1 applies to Creditor’s claim in this case because the loan is a reverse mortgage. - If Creditor’s claim is subject to
Bankruptcy Rule 3002.1 , the court must determine what the penalty is for not complying with the rule. - If Creditor’s claim is not subject to
Bankruptcy Rule 3002.1 , the court must determine the amount owed by Debtor to Creditor.
An agreed order was entered July 25, 2025, resetting the evidentiary hearing for August 28, 2025. On that date the debtor’s attorney, the Chapter 13 trustee, and Ms. Cambron on behalf of Mortgage Assets appeared for the hearing. Surprisingly, none of the attorneys chose to present any evidence of any kind—testimonial, documentary, or otherwise. Instead, the attorneys presented arguments, focusing primarily on one question of law: whether Mortgage Assets was required to comply with
Despite the lack of any documents being presented though a witness at the hearing, the court will consider certain documents identified by the attorneys. Included in the parties’ joint statement at paragraph no. 3 is the stipulation that “Creditor holds a claim [See Court Claim Register, Claim # 7-1] …. True and accurate copies of the Note, Deed of Trust and other documents establishing Movant’s perfected security interest … are attached hereto as Exhibit ‘A’ and are
II. The Chapter 13 Plan Mandated Compliance with Rule 3002.1.
The holder of the claim was required to comply with
The debtor’s Chapter 13 plan follows the court’s form (designated as Local Form 3015.1), the use of which is mandated by E.D. Tenn. LBR 3015-1(a). Part 3 of the court’s form plan governs the treatment of secured claims, and Part 3.1 specifically governs secured claims that are being treated in accordance with
Part 3.1 of the debtor’s Chapter 13 plan—which includes the treatment of the Reverse Mortgage—is reproduced here:
Part 3: Treatment of Secured Claims
3.1 Maintenance of Payments and Cure of Default, If Any (Complete if applicable.)
Installment payments on the secured claims listed in this section, which will extend beyond the life of the plan, will be maintained during the plan, with payments disbursed by the trustee unless “Yes” is listed under “Direct Pay by Debtor(s)?” The holders of the secured claims will retain their liens following the completion of payments under the plan, and any unpaid balance of the claims is not subject to discharge. Any existing arrearage on a listed claim will be paid in full through disbursements by the trustee, with interest, if any, at the rate stated. Any postpetition installment payment changes and fees, expenses, and charges noticed in conformity with
The installment payment and amount of arrearage stated in an allowed claim, proof of which is filed, control over any contrary amounts listed below.
If relief from the automatic stay is ordered as to any collateral described below, all payments under this section to creditors secured solely by that collateral will cease unless otherwise ordered by the court.
| Name of Creditor | Collateral Description | Principal Residence? | Installment Payment | Direct Pay by Debtor(s)? | Amount of Arrearage | Int. Rate on Arrearage | Arrearage Payment |
|---|---|---|---|---|---|---|---|
| Cascade Funding Mortgage Trust HB5 serviced by PHH Mortgage | 429 Easley Dr | Y | $0.00 | N | $4,138.45 | 0% | $120.00 |
The version of
The court’s form plan makes no distinction between claims secured by a traditional or non-traditional mortgage such as a reverse mortgage. If a claim is secured by the debtor’s principal residence, and a payment is listed under “Installment Payment” or “Arrearage Payment” or both, then the form plan provides that postpetition fees, expenses, and charges that are properly noticed in accordance with
Drafting Part 3.1 of the court’s form plan was not done in isolation of the practice that existed before the form plan was adopted on December 1, 2017, but was consistent with that of the unofficial form plans utilized by Chapter 13 trustees in this district both prior to and after the adoption of
Confirmation of the plan shall impose an affirmative duty on the holders and/or servicers of any claims secured by liens, mortgages and/or deeds of trust on the principal residence of the Debtors to do all of the following:
….
(6) To file with the court and serve upon the Trustee, the Debtors, and the attorney for the Debtors, by February 15 of each year governed by this plan, an Annual Statement detailing … (v) all fees and charges alleged to have accrued post-petition, along with an explanation thereof….
In re Scott, No. 2:08-bk-51306-MPP (Order Confirming Plan entered September 25, 2008; docket #53). Likewise, the Chapter 13 trustee’s form plan used in this division after the adoption of Rule
MORTGAGE CLAIMS: Mortgage lien holders shall file claims per applicable Federal Rules of Bankruptcy Procedure (FRBP), including but without limitation, Rules 3001 and/or 3002.1…. Creditors filing mortgage claims secured by debtor(s) principal residence shall file: Mortgage Proof of Claim Attachment 410A (Attachment A); Notice of Mortgage Payment Changes on Form 4105-1 (Supplement 1); and Notice of Post-Petition Mortgage Fees, Expenses, and Charges ….
In re Roberts, No. 2:16-bk-51007-MPP (Order Confirming Plan entered August 26, 2016; docket #41). As shown by the language in the foregoing plans, in this district the holders of claims secured by a debtor’s principal residence have long been required to provide notice of postpetition fees, expenses, and charges without distinction as to the type of mortgage.
Timely noticing of a postpetition fee, expense, or charge provides transparency to the mortgage claim being administered so that the debtor and the Chapter 13 trustee have an opportunity to determine whether adjustments need to be made to pay or challenge the amount so that the mortgage will not be in default on the plan’s completion. Prior to the adoption of
Bankruptcy Rule 3002.1 was adopted to resolve significant and often hidden problems encountered by Chapter 13 debtors who utilized§ 1322(b)(5) of the Bankruptcy Code to cure mortgage defaults in their confirmed plans. While debtors could cure an arrearage on their principal residence under§ 1322(b)(5) , they often incurred significant fees and other costs as a result of postpetition defaults or from interest or escrow fluctuations under the terms of the original loan documents. Fearful that any attempt to address these fees and charges could be construed as a violation of the automatic stay, many creditors would not inform debtors that these charges had been incurred until after the Chapter 13 case was closed. As the fees and charges were postpetition obligations not included in the plan and thus not discharged at the conclusion of the case, these debtors would emerge from bankruptcy only to face a substantial and previously undisclosed arrearage. This outcome was inconsistent with the goal of providing debtors with a fresh start.
In re Sheppard, No. 10-33959-KRH, 2012 WL 1344112, at *2 (Bankr. E.D. Va. Apr. 18, 2012).
Subdivision (a) is amended to clarify the applicability of the rule. Its provisions apply whenever a chapter 13 plan provides that contractual payments on the debtor’s home mortgage will be maintained, whether they will be paid by the trustee or directly by the debtor. The reference to
§ 1322(b)(5) of the Code is deleted to make clear that the rule applies even if there is no prepetition arrearage to be cured. So long as a creditor has a claim that is secured by a security interest in the debtor’s principal residence and the plan provides that contractual payments on the claim will be maintained, the rule applies.
Advisory Committee Notes (2016 Amendment).
The 2016 amendment changed subsection (a) of
This rule applies in a chapter 13 case to claims (1) that are secured by a security interest in the debtor’s principal residence, and (2) for which the plan provides that either the trustee or the debtor will make contractual installment payments….
The holder of the claim shall file and serve on the debtor, debtor’s counsel, and the trustee a notice itemizing all fees, expenses, or charges (1) that were incurred in connection with the claim after the bankruptcy case was filed, and (2) that the holder asserts are recoverable against the debtor or against the debtor’s principal residence. (Emphasis supplied.)
The court’s construction of Part 3.1 of the form plan to include all types of long-term mortgages was recently borne out by an amendment to
Subdivision (a), which describes the rule’s applicability, is amended to delete the words “contractual” and “installment” in the phrase “contractual installment payments” in order to clarify and broaden the rule’s applicability. The deletion of “contractual” is intended to make the rule applicable to home mortgages that may be modified and are being paid according to the terms of the plan rather than strictly according to the contract, including mortgages being paid in full during the term of the plan. The word “installment” is deleted to clarify the rule’s applicability to reverse mortgages. They are not paid in installments, but a debtor may be curing a default on a reverse mortgage under the plan. If so, the rule applies.
Advisory Committee Note (2025 Amendment) (emphasis supplied). The 2025 change to
This rule applies in a Chapter 13 case to a claim that is secured by a security interest
in the debtor’s principal residence and for which the plan provides for the trustee or debtor to make contractual installmentpayment on the debt….”
With respect to reverse mortgages, the clarification of
In Reed the debtor executed a loan to pay ad valorem taxes owed on his principal residence secured by a deed of trust that extended an existing tax lien. The Chapter 13 plan paid the creditor the principal balance over the life of the plan along with prepetition arrears. The creditor argued that
In LeGare-Doctor the debtor had a reverse mortgage encumbering his principal residence. The court noted that the debtor “was not required to remit monthly payments to repay the loan secured by the Reverse Mortgage,” but was “contractually required to pay annual property taxes and hazard insurance premiums for the Property during the term of the Reverse Mortgage.” In re LeGare-Doctor, 634 B.R. at 454. Prior to the bankruptcy filing the creditor had advanced the payment of taxes, fees, and attorney’s fees and costs associated with a foreclosure judgment. The debtor’s plan “proposed to cure any default by paying Creditor, through the Trustee, monthly installment payments during the plan’s sixty-month term to repay taxes, fees, and attorney’s fees and costs.” Id. at 455. A disagreement arose concerning the creditor’s postpetition advance for hazard insurance. The debtor argued that the advance should be disallowed because the creditor never disclosed it within the 180-day period prescribed by
Mortgage Assets’ brief does not address the Reed decision but does take issue with the decision in LeGare-Doctor, stating “that LeGare-Doctor is not binding, was incorrectly decided, and should not be adopted in this jurisdiction.” However, Mortgage Assets fails to offer any contrary decision. The only decision other than LeGare-Doctor cited by Mortgage Assets is In re White, and it is offered for the proposition that contractual installment payments “refers to payments made pursuant to the original contract between the debtor and the secured creditor.” In re White, 641 B.R. 717, 724 (Bankr. S.D. Ga. 2022). White is of no help to Mortgage Assets.
The Chapter 13 plan in White bifurcated the creditor’s claim secured by the debtor’s residence that was personal property. The secured portion of the claim was paid over the life of the plan, while the unsecured portion was paid a nominal dividend with other general unsecured creditors. Id. at 720. After the creditor filed a
The White decision offers no support for Mortgage Assets’ stated position that “because the plan does not make contractual installment payments, then Rule 3002.1 does not apply.”
While this court knows the LeGare-Doctor decision is not binding, the court does not agree it was incorrectly decided. As the court in McGruder observed, both the White and LeGare-Doctor decisions applied the appropriate “framework … [by] focusing on the respective plan’s proposed treatment of the secured creditor’s claim and whether said treatment was in accordance with the original contract ….” In re McGruder, No. 20-20758, 2025 WL 991993, at *5 (Bankr. D. Kan. Apr. 1, 2025). The McGruder decision involved a fully matured mortgage that the debtor had modified under her plan to pay it off. The court said that in such an event “the secured creditor is said to have lost the ‘benefit of its original contract negotiated with the debtor’ as the confirmed plan, pursuant to
Mortgage Assets’ position would require the court to construe the phase “contractual installment payments” to mean “maintenance payments.” The court will not do so. Instead, by focusing on whether the treatment of the claim here is in accordance with the original contract, this court aligns itself with the decisions in LeGare-Doctor, White, and McGruder. The court concludes that the plan’s treatment of the claim based on the Reverse Mortgage was in accordance with the original contract. The Property Charges Balance of $3,710.03 and the Hazard Insurance
III. Application of Arrearage Payments
An examination of the reports generated by PHH Mortgage Services reveals that the Arrearage payments from the Chapter 13 trustee were misapplied. The following table presents the Principal and Corporate Advances from the Internal Payoff Statement and Loan Balance History as of December 7, 2021. Principal Advances totaling $91,370.79 in Part A is the sum of $87,680.76 for Advances (Principal) and $3,710.03 for Property Charges Balance in Part B. The Corporate Advances totaling $773.72 in Part A are itemized in Part B and consist of the Title Inspection of $265, Property Preservation Inspections of $80, and $428.72 for Hazard Insurance (calculated by crediting the Hazard Insurance Repay of $1,630.28 to the Corporate Advance for Hazard Insurance of $2,059). Together, the Property Charges Balance and Corporate Advance for Hazard Insurance are the Arrearage of $4,138.75.
| A INTERNAL PAYOFF STATEMENT AS OF DECEMBER 7, 2021 | B LOAN BALANCE HISTORY AS OF DECEMBER 7, 2021 | |||
|---|---|---|---|---|
| Principal Advances: | $ 91,370.79 | Property Charges Balance | 07/02/21 | $ 3,710.03 |
| Interest: | $ 28,865.02 | Advances (Principal) | 07/02/21 | $ 87,680.76 |
| MIP: | $ 7,249.50 | Principal Amount | $ 91,370.79 | |
| Servicing Fees: | $ 6,090.00 | Prop Preserve – Inspect | 08/31/21 | $ 20.00 |
| Corporate Advances: | $ 773.72 | Title Inspection | 09/09/21 | $ 265.00 |
| Intra Month Per Diem Total: | $ 43.29 | Prop Preserve – Inspect | 09/28/21 | $ 20.00 |
| Total Amount Due: | $ 134,392.32 | Hazard Insurance | 10/11/21 | $ 2,059.00 |
| Prop Preserve – Inspect | 10/19/21 | $ 20.00 | ||
| Prop Preserve – Inspect | 11/01/21 | $ 20.00 | ||
| Hazard Insurance Repay | 11/04/21 | ($ 1,630.28) | ||
| Corporate Advance Amount: | $ 773.72 | |||
| A INTERNAL PAYOFF STATEMENT AS OF DECEMBER 7, 2021 | B INTERNAL PAYOFF STATEMENT AS OF MARCH 4, 2025 | ||
|---|---|---|---|
| Principal Advances: | $ 91,370.79 | Principal Advances: | $ 91,370.79 |
| Interest: | $ 28,865.02 | Interest: | $ 52,038.41 |
| MIP: | $ 7,249.50 | MIP: | $ 5,856.76 |
| Servicing Fees: | $ 6,090.00 | Servicing Fees: | $ 7,455.00 |
| Corporate Advances: | $ 773.72 | Corporate Advances: | $ 12,567.04 |
| Intra Month Per Diem Total: | $ 43.29 | Intra Month Per Diem Total: | $ 443.75 |
| Total Amount Due: | $ 134,392.32 | Total Amount Due: | $ 169,776.75 |
The two sets of number comparisons are problematic. First, the total amount of MIP (or Mortgage Insurance Premiums) decreased during the 40-month interval when it should have increased.6 Second, Principal Advances of $91,370.79, which is the sum of Advances (Principal) of $87,680.76 and Property Charges Balance of $3,710.03 as shown in the first table, remained constant when it should have decreased. The Property Charges Balance was paid off as a part of the Arrearage. With the elimination of the Property Charges Balance, Principal Advances should
The accounting in the Loan Balance History of March 4, 2025, for the categories of MIP and Principal Advances reveals the problems as shown in Table 3 in the appendix. PHH Mortgage Services misapplied the payments from the Chapter 13 trustee on the Property Charges Balance portion of the Arrearage against the MIP balance. The MIP should have increased by the postpetition monthly MIP payments totaling $2,317.29. Adding those payments to the MIP balance of $7,249.50 that existed on December 7, 2021, and excluding the $3,710.03 in misapplied payments, the balance for MIP is $9,566.79 as of March 4, 2025, not $5,856.76. When the payments of $3,710.03 on the Arrearage are applied to Property Charges Balance as they should have been, the Principal Advances balance is reduced from $91,370.79 to $87,680.76. The misapplied payments must be reversed and applied to eliminate the Property Charges Balance from Principal Advances.
IV. The Postpetition Fees, Charges, and Expenses
Postpetition fees, expenses, and charges totaling $17,320.04 are itemized on the Loan Balance History for Corporate Advances of March 4, 2025, shown on Table 4 of the appendix. Postpetition credits itemized on the report of $898 for a property tax offset, $4,050 for a hazard insurance partial offset, and $150 in other reversals reduce the postpetition fees, expenses, and charges balance to $12,222.04. Of that sum, $8,569 is for force-placed insurance expenditures that the claim holder asserts is a postpetition default requiring cure.7 The remaining balance of $3,653.04 in postpetition fees, expenses, and charges consists of $1,450 in Bankruptcy Attorney Fees, $1,016.04 in Other, $910 in Attorney Fees, $200 in Property Preservation Inspections, $65 for Title Exam Fee, and $12 in Recording Fees.
The noticing of fees, expenses, and charges required by
Subsection (h) of
If, upon receipt of a
Rule 3002.1(h) Motion, the mortgage creditor still believes that the debtor’s mortgage loan has a postpetition arrearage, the mortgage creditor must appear at the hearing on the debtor’sRule 3002.1(h) motion and present evidence to establish its entitlement to the postpetition amounts claimed in its supplement. (Citations omitted.) If the mortgage creditor fails to appear at the hearing, or appears at the hearing but fails to submit evidence that establishes its entitlement to the postpetition amounts described in its supplement, the mortgage creditor has not met its burden of proof. In this event, the Court may find that the alleged postpetition arrearage did not exist, or find that the mortgage creditor has waived the opportunity to claim and collect these amounts. (Citations omitted.)
In re Ferrell, 580 B.R. 181, 185 (Bankr. D.S.C. 2017).
Once a postpetition fee, expense, or charge is justifiably challenged by a debtor or Chapter 13 trustee, the claim holder must establish that the fee, expense, or charge is valid and reasonable. To establish the validity of the fees, expenses, and charges a claim holder must establish a basis
Mortgage Assets did not identify a specific contractual basis for the force-placed insurance expenditures other than generally under the terms of the Reverse Mortgage. Of the documents comprising the Reverse Mortgage, the court has only the Note and Security Instrument to consider. The claim holder did not provide the Loan Agreement containing the terms under which the Reverse Mortgage was made.
The Note does not provide a basis for the force-placed insurance premiums. The pertinent provisions of the Note are found in paragraph 7 that recites the “Lender may require immediate payment in full of all outstanding principal and interest if … (B) An obligation of the Borrower under the Security Instrument is not performed.” Part (C) then provides that “[i]f Lender has required immediate payment in full as described above, the debt enforced through sale of the Property may include costs and expenses, including reasonable and customary attorneys’ fees, associated with enforcement of this Note to the extent not prohibited by applicable law….” The debtor’s attorney stated that the bankruptcy was filed to halt a noticed foreclosure. But even if the declaration of foreclosure triggered the requirement of “immediate payment in full,” the Note requires that “the debt be enforced through sale of the Property” before costs and fees are
On the other hand, the Security Instrument requires the Borrower to insure the property against hazards and provides that the Lender may insure the property if the Borrower fails to do so. The preface of the Security Instrument states that it secures not only “the repayment of the debt evidenced by the Note, with interest,” but also “payment of all other sums, with interest, advanced under Paragraph 5 to protect the security of this Security Instrument....” Paragraph 2 titled “Payment of Property Charges” states that “Borrower shall pay all property charges consisting of taxes ... and hazard insurance premiums ... in a timely manner ....” Paragraph 3 titled “Fire, Flood and Other Hazard Insurance” states that “Borrower shall insure all improvements on the Property ... against any hazards, causalities, and contingencies, including fire....” Finally, paragraph 5 provides in pertinent part:
5. Charges to Borrower and Protection of Lender‘s Rights in the Property. Borrower shall pay all governmental or municipal charges, fines and impositions that are not included in Paragraph 2....
If Borrower fails to make these payments or the property charges required by Paragraph 2, or fails to perform any other covenants and agreements contained in this Security Instrument, or there is a legal proceeding that may significantly affect Lender‘s interest in the Property (such as a proceeding in bankruptcy, for condemnation or to enforce laws or regulations), then Lender may do and pay whatever is necessary to protect the value of the Property and Lender‘s rights in the Property, including payment of taxes, hazard insurance and other items mentioned in Paragraph 2.9 (Emphasis supplied.)
Unlike the postpetition discretionary charges incurred as Corporate Advances, the nondiscretionary monthly recurring MIP and Servicing Fee of $35 were not required to be noticed under
Relying on In re Blakey, the Chapter 13 trustee argued that—even if the charges assessed for force-placed insurance were valid—the amounts charged were not reasonable because PHH Mortgage Services over-insured the residence. See In re Blakey, 664 B.R. 221, 222 (Bankr. W.D. Pa. 2024) (court held premium charged was unreasonable where force-placed coverage was more than four times fair market value of residence). In support of this position, the Chapter 13 trustee stated that at the time of debtor‘s bankruptcy filing on December 7, 2021, the balance of the mortgage was less than $135,000 and the tax appraisal on property was $149,200. The court cannot consider the tax appraised value for the residence because the parties did not stipulate it or otherwise submit it into evidence. The court has only the debtor‘s verified value of $149,200 for the residence set forth in her schedule A/B as of the bankruptcy filing in 2021.
In considering the reasonableness of the force-placed insurance charges in Blakey, the court was presented with a force-placed policy with coverage in the amount of $895,000 with an annual premium of $9,437. Because the loan balance was only around $87,000, the court found the charge to be unreasonable. The creditor insisted that it was only passing along the undisputed actual cost of the policy that bore “a reasonable relationship to the servicer‘s cost of providing the service, and ... [was] not otherwise prohibited by applicable law” as permitted by
Here the amounts of coverage were $337,000 effective October 2022, $347,447 effective October 2023, and $355,091 effective October 2024 as shown in the attachments to Mortgage Assets’ brief. Using an approximate loan balance of $170,000 as of March 2025 for comparison, the coverage for October 2024 through October 2025 is approximately twice the loan balance. The prior years of coverage would probably be in that same range of two times the approximate loan balances during those periods. In comparison to the value of the residence, the calculation is a little more difficult. If the property value was approximately $150,000 in December 2021, appreciation over time would move the value closer to the coverage amounts as home values in this area rose significantly during that 3-year time span.
Like the court in Blakey, this court recognizes that force-placed insurance coverage greater than the loan balance does little to benefit a borrower. As stated in paragraph 5 titled “Loss Settlement” in the “Conditions” section of the policies attached to Mortgage Assets’ brief, in the event of a loss the insurance company “would pay only the least of the following: (1) the net loan balance at the time of the loss, (2) the cost to repair or replace, or (3) the policy limits.” Although the claim holder bears the ultimate burden of proving that a charge is reasonable, the objecting party must do something more than just subjectively challenge the amount; the challenge needs some objective justification. No evidence was presented of a reasonable coverage amount or the approximate cost of such coverage during the relevant coverage periods. All the court has is the bare assertion that the PHH Mortgage Services over-insured the residence. Because the court has no proof that the market value of debtor‘s residence during the relevant coverage periods was significantly less than the coverage, the court cannot conclude the coverage amounts for the force-placed insurance were excessive. The court also notes that notwithstanding the levels of coverage force-placed on the residence, the debtor agreed to pay the full costs of the force-placed insurance
Mortgage Assets makes one final argument implying that, even if it did not technically comply with
- a document titled “Evidence of Insurance” from Standard Guaranty Insurance Company dated October 29, 2024, regarding the purchase of $4,308 for force-placed insurance coverage of $355,091 effective from October 28, 2024, through October 28, 2025;
- a letter from PHH Mortgage Services to debtor dated March 14, 2024, regarding the purchase of $4,208 for force-placed insurance coverage of $347,447 effective from October 28, 2023, through October 28, 2024, along with the declarations page and policy; and
- a letter from PHH Mortgage Services to debtor dated January 10, 2024, regarding the purchase of $4,103 for force-placed insurance coverage of $337,000 effective from October 28, 2022, through October 28, 2023, along with the declarations page and policy.
Apparently, Mortgage Assets considers that these documents should be accepted as proof that notice of the costs for the force-placed insurance was provided to the debtor, just not in conformity with
Section 1024.37 of the Real Estate Settlement Procedures Act (RESPA) governs force-placed insurance for federally related mortgage loans as is the case here. See
(c) Requirements before charging borrower for force-placed insurance—
(1) In general. Before a servicer assesses on a borrower any premium charge or fee related to force-placed insurance, the servicer must:
(i) Deliver to a borrower or place in the mail a written notice containing the information required by paragraph (c)(2) of this section at least 45 days before a servicer assesses on a borrower such charge or fee;
(ii) Deliver to the borrower or place in the mail a written notice in accordance with paragraph (d)(1) of this section; and
(iii) By the end of the 15–day period beginning on the date the written notice described in paragraph (c)(1)(ii) of this section was delivered to the borrower or placed in the mail, not have received, from the borrower or otherwise, evidence demonstrating that the borrower has had in place, continuously, hazard insurance coverage that complies with the loan contract‘s requirements to maintain hazard insurance.
....
(d) Reminder notice—
(1) In general. The notice required by paragraph (c)(1)(ii) of this section shall be delivered to the borrower or placed in the mail at least 15 days before a servicer assesses on a borrower a premium charge or fee related to force-placed insurance. A servicer may not deliver to a borrower or place in the mail the notice required by paragraph (c)(1)(ii) of this section until at least 30 days after delivering to the borrower or placing in the mail the written notice required by paragraph (c)(1)(i) of this section.
....
The written notice required under (c)(1)(i) has to include, among other things, statements that (1) hazard insurance is required on the borrower‘s property, (2) hazard insurance is expiring or has expired, (3) the servicer does not have evidence of hazard insurance coverage past the expiration date, (4) the servicer has purchased or will purchase such insurance at borrower‘s expense, (5) hazard insurance the servicer has or will purchase may cost significantly more and
“Servicers may not impose charges for force-placed insurance without first completing [the] ... forty-five day process ....” Marrett v. Aroostook Cnty. Fed. Sav. & Loan, No. 1:24-CV-00300-JAW, 2024 WL 4344713, at *7 (D. Me. Sept. 30, 2024), reconsideration denied, No. 1:24-CV-00300-JAW, 2024 WL 6080493 (D. Me. Oct. 4, 2024), and report and recommendation adopted, No. 1:24-CV-00300-JAW, 2024 WL 4850209 (D. Me. Nov. 21, 2024) (citing
The documents offered by Mortgage Assets show that PHH Mortgage Services assessed the debtor a premium of $4,103 on January 4, 2024, six days before the date of the reminder notice informing debtor of the amount. Assessing the charge before the reminder notice dated January 10, 2024, was a violation of
V. The Relief
The debtor‘s bankruptcy filing was necessitated by a foreclosure scheduled because of her failure to maintain hazard insurance coverage on the residence as required under the terms of the Reverse Mortgage. The debtor‘s plan was to become current on the Reverse Mortgage by curing the default consisting of the Property Charges Balance of $3,710.03 and the Hazard Insurance of $428.72. Although no explanation was ever provided to the court as to the source of the Property Charges Balance or why PHH Mortgage Services chose to treat the Property Charges Balance as a Principal Advance instead of a Corporate Advance, the court is almost certain the Property Charges Balance was for force-placed insurance and possibly property taxes assessed by the prior servicer of the Reverse Mortgage. This conclusion is based on the term “Property Charges Balance” being used interchangeably with “Prior Property Servicer Charges” by the servicer and paragraph 2 of the Security Instrument titled “Payment of Property Charges” concerning the
Upon expiration of the policy effective beginning October 2021, the debtor failed to renew her insurance again, resulting in the two policies being force-placed effective October 2022 through October 2024 costing $8,311 that led to the filing of the motion for relief from stay. The court noted earlier that the amount Mortgage Assets asserted in its motion, $8,849.75, was incorrect. The amount in default at the time the motion was filed was $8,311, being the total of the charges for the two force-placed insurance policies of $4,103 and $4,208. Table 4 shows that at the time the motion was filed the unpaid balance of the Arrearage was $418.75. Adding $8,311 to the $418.75 Arrearage balance and a $120 erroneous charge (that was later reversed) equals the $8,849.75 amount Mortgage Assets stated was in default. Therefore, Mortgage Assets grounded its motion for relief from stay in part on accusations that the debtor was in default of the Reverse Mortgage by not paying the Arrearage and property taxes on the residence, neither of which were true.
Although the parties had resolved the motion for relief from stay with an agreement by the debtor to extend her plan to pay $8,311 over an additional 24 months, no order was forthcoming, and the motion was denied. Without casting blame the court observes that nothing prevented the debtor at that point from unilaterally filing a motion to modify her plan to implement what the agreement had contemplated. The court is more disturbed by what did not occur next. Notwithstanding the debtor having been alerted by the motion that the failure to maintain insurance was a postpetition default that would lead to foreclosure, and notwithstanding the claim holder having been alerted that both debtor‘s attorney and the Chapter 13 trustee insisted that
Of all the postpetition fees, expenses, and charges incurred, the claim holder asserts that only those for force-placed insurance constitute a default under the Reverse Mortgage. Because of those non-noticed insurance charges, the debtor now faces the harm of the Reverse Mortgage being foreclosed and loss of her home after entry of a discharge. A foreclosure will deny the debtor the fresh start that the completion of her Chapter 13 plan was meant to provide. The purpose of
In the event a claim holder fails to timely provide the information required under subsection (c) of
[T]he court may, after notice and a hearing, take one or both of these actions:
(1) preclude the holder from presenting the omitted information in any form as evidence in a contested matter or adversary proceeding in the case—unless the failure was substantially justified or is harmless; and
(2) award other appropriate relief, including reasonable expenses and attorney‘s fees caused by the failure.
TABLE 1
| Total Amount Due for Reinstatement as of 12/07/2021 | ||
|---|---|---|
| Corporate Advances | ||
| Date | Type | Amount |
| 10/11/2021 | Corp Adv – S305 – Hazard Insurance | $ 2,059.00 |
| Total | $ 2,059.00 | |
| Remittances | ||
| Date | Type | Amount |
| 11/04/2021 | Corp Adv – S305 – Hazard Insurance Repay | ($ 1,630.28) |
| Total | ($ 1,630.28) | |
| Transfer Charges | ||
| Date | Type | Amount |
| 11/30/2021 | Prior Servicer Property Charges | $ 3,710.03 |
| Total | $ 3,710.03 | |
| Total Amount Due for Reinstatement as of 05/05/2025 | ||
|---|---|---|
| Corporate Advances | ||
| Date | Type | Amount |
| 10/11/2021 | Corp Adv – S305 – Hazard Insurance | $ 2,059.00 |
| 12/13/2021 | Corp Adv – S305 – Taxes | $ 898.00 |
| 01/31/2022 | Corp Adv – S305 – Taxes Void | ($ 898.00) |
| 01/04/2024 | Corp Adv – S305 – Hazard Insurance | $ 4,103.00 |
| 03/07/2024 | Corp Adv – S305 – Hazard Insurance | $ 4,208.00 |
| 11/05/2024 | Corp Adv – S305 – Hazard Insurance | $ 4,308.00 |
| Total | $ 14,678.00 | |
| Remittances | ||
| Date | Type | Amount |
| 11/04/2021 | Corp Adv – S305 – Hazard Insurance Repay | ($ 1,630.28) |
| 03/23/2022 | Part Repay – S305 – Transferred Prop Charges | ($ 210.51) |
| 04/05/2022 | Part Repay – S305 – Transferred Prop Charges | ($ 143.01) |
| 05/06/2022 | Part Repay – S305 – Transferred Prop Charges | ($ 125.38) |
| 06/07/2022 | Part Repay – S305 – Transferred Prop Charges | ($ 125.38) |
| 07/07/2022 | Part Repay – S305 – Transferred Prop Charges | ($ 125.38) |
| 08/05/2022 | Part Repay – S305 – Transferred Prop Charges | ($ 125.38) |
| 08/30/2022 | Part Repay – S305 – Transferred Prop Charges | ($ 125.38) |
| 10/06/2022 | Part Repay – S305 – Transferred Prop Charges | ($ 127.63) |
| 11/03/2022 | Part Repay – S305 – Transferred Prop Charges | ($ 127.63) |
| 12/08/2022 | Part Repay – S305 – Transferred Prop Charges | ($ 127.63) |
| 01/10/2023 | Part Repay – S305 – Transferred Prop Charges | ($ 127.63) |
| 02/03/2023 | Part Repay – S305 – Transferred Prop Charges | ($ 152.63) |
| 03/08/2023 | Part Repay – S305 – Transferred Prop Charges | ($ 158.68) |
| 04/05/2023 | Part Repay – S305 – Transferred Prop Charges | ($ 120.00) |
| 05/03/2023 | Part Repay – S305 – Transferred Prop Charges | ($ 120.00) |
| 06/06/2023 | Part Repay – S305 – Transferred Prop Charges | ($ 120.00) |
| 07/11/2023 | Part Repay – S305 – Transferred Prop Charges | ($ 120.00) |
| 07/21/2023 | Part Repay – S305 – Transferred Prop Charges | ($ 92.63) |
| 08/08/2023 | Part Repay – S305 – Transferred Prop Charges | ($ 147.37) |
| 09/11/2023 | Part Repay – S305 – Transferred Prop Charges | ($ 120.00) |
| 10/11/2023 | Part Repay – S305 – Transferred Prop Charges | ($ 120.00) |
| 11/08/2023 | Part Repay – S305 – Transferred Prop Charges | ($ 120.00) |
| 12/12/2023 | Part Repay – S305 – Transferred Prop Charges | ($ 120.00) |
| 01/12/2024 | Part Repay – S305 – Transferred Prop Charges | ($ 120.00) |
| 02/08/2024 | Part Repay – S305 – Transferred Prop Charges | ($ 120.00) |
| 03/08/2024 | Part Repay – S305 – Transferred Prop Charges | ($ 120.00) |
| 04/09/2024 | Part Repay – S305 – Transferred Prop Charges | ($ 120.00) |
| 05/10/2024 | Part Repay – S305 – Transferred Prop Charges | ($ 120.00) |
| 06/10/2024 | Part Repay – S305 – Transferred Prop Charges | ($ 110.03) |
| 06/10/2024 | Corp Adv – S305 – Hazard Insurance Repay | ($ 9.97) |
| 07/15/2024 | Corp Adv – S305 – Hazard Insurance Repay | ($ 120.00) |
| 07/17/2024 | Corp Adv – S305 – Hazard Insurance Repay Rev | $ 120.00 |
| 07/17/2024 | Corp Adv – S305 – Hazard Insurance Repay | ($ 120.00) |
| 08/14/2024 | Corp Adv – S305 – Hazard Insurance Repay | ($ 120.00) |
| 10/08/2024 | Corp Adv – S305 – Hazard Insurance Repay | ($ 178.75) |
| 11/26/2024 | Corp Adv – S305 – Hazard Insurance Repay | ($ 4,050.00) |
| Total | ($ 9,819.03) | |
| Transfer Charges | ||
|---|---|---|
| Date | Type | Amount |
| 05/05/2025 | Prior Servicer Property Charges | $ 3,710.03 |
| Total | $ 3,710.03 | |
TABLE 3
| LOAN BALANCE HISTORY FOR MIP AS OF MARCH 4, 2025 | ||
|---|---|---|
| Date | Transaction Description | MIP |
| 12/07/2021 | Balance on Bankruptcy Filing | $ 7,249.50 |
| 12/31/2021 | Monthly MIP Accrual | $ 55.66 |
| 01/31/2022 | Monthly MIP Accrual | $ 55.75 |
| 02/28/2022 | Monthly MIP Accrual | $ 55.85 |
| 03/23/2022 | Part Repay − Transferred Property Charges | ($ 210.51) |
| 03/31/2022 | Monthly MIP Accrual | $ 55.92 |
| 04/05/2022 | Part Repay − Transferred Property Charges | ($ 143.01) |
| 04/30/2022 | Monthly MIP Accrual | $ 55.92 |
| 05/06/2022 | Part Repay − Transferred Property Charges | ($ 125.38) |
| 05/31/2022 | Monthly MIP Accrual | $ 56.01 |
| 06/07/2022 | Part Repay − Transferred Property Charges | ($ 125.38) |
| 06/30/2022 | Monthly MIP Accrual | $ 56.12 |
| 07/07/2022 | Part Repay − Transferred Property Charges | ($ 125.38) |
| 07/31/2022 | Monthly MIP Accrual | $ 56.25 |
| 08/05/2022 | Part Repay − Transferred Property Charges | ($ 125.38) |
| 08/30/2022 | Part Repay − Transferred Property Charges | ($ 125.38) |
| 08/31/2022 | Monthly MIP Accrual | $ 56.37 |
| 09/30/2022 | Monthly MIP Accrual | $ 56.53 |
| 10/06/2022 | Part Repay − Transferred Property Charges | ($ 125.38) |
| 10/31/2022 | Monthly MIP Accrual | $ 56.71 |
| 11/03/2022 | Part Repay − Transferred Property Charges | ($ 127.63) |
| 11/30/2022 | Monthly MIP Accrual | $ 56.91 |
| 12/08/2022 | Part Repay − Transferred Property Charges | ($ 127.63) |
| 12/31/2022 | Monthly MIP Accrual | $ 57.14 |
| 01/10/2023 | Part Repay − Transferred Property Charges | ($ 127.63) |
| 01/31/2023 | Monthly MIP Accrual | $ 57.40 |
| 02/03/2023 | Part Repay − Transferred Property Charges | ($ 152.63) |
| 02/28/2023 | Monthly MIP Accrual | $ 57.65 |
| 03/08/2023 | Part Repay − Transferred Property Charges | ($ 158.68) |
| 03/31/2023 | Monthly MIP Accrual | $ 57.90 |
| 04/05/2023 | Part Repay − Transferred Property Charges | ($ 120.00) |
| 04/30/2023 | Monthly MIP Accrual | $ 58.16 |
| 05/03/2023 | Part Repay − Transferred Property Charges | ($ 120.00) |
| 05/31/2023 | Monthly MIP Accrual | $ 58.43 |
| 06/06/2023 | Part Repay − Transferred Property Charges | ($ 120.00) |
| 06/30/2023 | Monthly MIP Accrual | $ 58.70 |
| 07/11/2023 | Part Repay − Transferred Property Charges | ($ 120.00) |
| 07/21/2023 | Part Repay − Transferred Property Charges | ($ 92.63) |
| 07/31/2023 | Monthly MIP Accrual | $ 58.97 |
| 08/08/2023 | Part Repay − Transferred Property Charges | ($ 147.37) |
| 08/31/2023 | Monthly MIP Accrual | $ 59.22 |
| 09/11/2023 | Part Repay − Transferred Property Charges | ($ 120.00) |
| 09/30/2023 | Monthly MIP Accrual | $ 59.53 |
| 10/11/2023 | Part Repay − Transferred Property Charges | ($ 120.00) |
| 10/31/2023 | Monthly MIP Accrual | $ 59.83 |
| 11/08/2023 | Part Repay − Transferred Property Charges | ($ 120.00) |
| 11/30/2023 | Monthly MIP Accrual | $ 60.14 |
| 12/12/2023 | Part Repay − Transferred Property Charges | ($ 120.00) |
| 12/31/2023 | Monthly MIP Accrual | $ 60.46 |
| 01/12/2024 | Part Repay − Transferred Property Charges | ($ 120.00) |
| 01/31/2024 | Monthly MIP Accrual | $ 60.78 |
| 02/08/2024 | Part Repay − Transferred Property Charges | ($ 120.00) |
| 02/29/2024 | Monthly MIP Accrual | $ 61.09 |
| 03/08/2024 | Part Repay − Transferred Property Charges | ($ 120.00) |
| 03/31/2024 | Monthly MIP Accrual | $ 61.36 |
| 04/09/2024 | Part Repay − Transferred Property Charges | ($ 120.00) |
| 04/30/2024 | Monthly MIP Accrual | $ 61.65 |
| 05/10/2024 | Part Repay − Transferred Property Charges | ($ 120.00) |
| 05/31/2024 | Monthly MIP Accrual | $ 61.96 |
| 06/10/2024 | Part Repay − Transferred Property Charges | ($ 110.03) |
| 06/30/2024 | Monthly MIP Accrual | $ 62.27 |
| 07/31/2024 | Monthly MIP Accrual | $ 62.62 |
| 08/31/2024 | Monthly MIP Accrual | $ 62.98 |
| 09/30/2024 | Monthly MIP Accrual | $ 63.34 |
| 10/31/2024 | Monthly MIP Accrual | $ 63.70 |
| 11/30/2024 | Monthly MIP Accrual | $ 64.03 |
| 12/31/2024 | Monthly MIP Accrual | $ 64.33 |
| 01/31/2025 | Monthly MIP Accrual | $ 64.66 |
| 02/28/2025 | Monthly MIP Accrual | $ 64.99 |
| Monthly MIP Accrual Total: | $ 2,317.29 | |
| Part Repay − Transferred Property Charges Total: | ($ 3,710.03) | |
| MIP: | $ 5,856.76 | |
| LOAN BALANCE HISTORY FOR PRINCIPAL AMOUNT AS OF MARCH 4, 2025 | ||
|---|---|---|
| 07/02/2021 | Property Charges Balance | $ 3,710.03 |
| 07/02/2021 | Advances (Principal) | $ 87,680.76 |
| Principal Amount: | $ 91,370.79 | |
| LOAN BALANCE HISTORY FOR CORPORATE ADVANCE AMOUNT AS OF MARCH 4, 2025 | ||
|---|---|---|
| Date | Transaction Description | Corporate Advance Amount |
| 12/07/21 | Balance on Bankruptcy Filing | $ 773.72 |
| 12/10/21 | Prop Preserve – Inspect | $ 20.00 |
| 12/13/21 | Taxes | $ 898.00 |
| 12/13/21 | Title Exam Fee | $ 65.00 |
| 12/17/21 | Other | $ 1,011.29 |
| 12/17/21 | Other | $ 4.75 |
| 12/17/21 | Attorney Fees | $ 390.00 |
| 12/17/21 | Attorney Fees | $ 260.00 |
| 12/17/21 | Attorney Fees | $ 260.00 |
| 12/17/21 | Recording Fees | $ 12.00 |
| 12/29/21 | Prop Preserve – Inspect | $ 20.00 |
| 01/25/22 | Prop Preserve – Inspect | $ 20.00 |
| 01/25/22 | Bnk Attorney Fees | $ 200.00 |
| 01/31/22 | Bnk Attorney Fees | $ 550.00 |
| 01/31/22 | Taxes Void | ($ 898.00) |
| 02/23/22 | Prop Preserve – Inspect | $ 20.00 |
| 03/22/22 | Prop Preserve – Inspect | $ 20.00 |
| 04/13/22 | Bnk Attorney Fees | $ 700.00 |
| 05/13/22 | Prop Preserve – Inspect | $ 20.00 |
| 06/08/22 | Prop Preserve – Inspect | $ 20.00 |
| 06/27/22 | Prop Preserve – Inspect | $ 20.00 |
| 07/07/22 | Prop Preserve – Inspect | $ 20.00 |
| 01/06/22 | Prop Preserve – Inspect | $ 20.00 |
| 01/04/24 | Hazard Insurance | $ 4,103.00 |
| 03/07/24 | Hazard Insurance | $ 4,208.00 |
| 06/10/24 | Hazard Insurance Repay* | ($ 9.97) |
| 07/15/24 | Hazard Insurance Repay* | ($ 120.00) |
| 07/17/24 | Hazard Insurance Repay | $ 120.00 |
| 07/17/24 | Hazard Insurance Repay | ($ 120.00) |
| 08/14/24 | Hazard Insurance Repay* | ($ 120.00) |
| 10/08/24 | Hazard Insurance Repay* | ($ 178.75) |
| 11/05/24 | Hazard Insurance Repay | $ 4,308.00 |
| 11/26/24 | Hazard Insurance Repay | ($ 4,050.00) |
| 12/10/24 | Prop Preserve – Inspect | $ 30.00 |
| 12/11/24 | Re-class Disbursement | ($ 30.00) |
| Corporate Advances Balance on Bankruptcy Filing | $ 773.72 | |
| Postpetition Corporate Advances | $ 17,320.04 | |
| Postpetition Corporate Advances Credits | ($ 5,098.00) | |
| Postpetition Corporate Advances Credits from Trustee Payments | ($ 428.72) | |
| Corporate Advance Amount with Postpetition Arrearage: | $ 12,567.04 | |
| Corporate Advance Amount Excluding Postpetition Arrearage: | $ 3,653.04 | |
# # #
Notes
Paragraph 5 goes on to state regarding MIP and Servicing Fees:
To protect Lender‘s security in the Property, Lender shall advance and charge to Borrower all amounts due to the Secretary for the Mortgage Insurance Premium as defined in the Loan Agreement as well as all sums due to the loan servicer for servicing activities as defined in the Loan Agreement. Any amounts disbursed by Lender under the Paragraph shall become additional debt of Borrower as provided for in the Loan Agreement and shall be secured by this Security Instrument.
The assessment of the charge before the expiration of the reminder notice‘s 15-day period may have been acceptable in the event of renewal or replacement of force-placed insurance as subsection (e) of
[I]f not prohibited by State or other applicable law, if a servicer has renewed or replaced existing force-placed insurance and receives evidence demonstrating that the borrower lacked insurance coverage for some period of time following the expiration of the existing force-placed insurance ..., the servicer may, promptly upon receiving such evidence, assess on the borrower a premium charge or fee related to renewing or replacing existing force-placed insurance for that period of time.
Subsection (i) was relocated to (h) in the amendment to
The amendment to