In a Texas decsision, the Bankruptcy Court held that a Mortgage Creditor waived right to recover escrow shortages by failing to provide escrow analyses required by RESPA. The Garza Court recognized that the proper remedy for a failure to comply with RESPA’s annual escrow analysis requirement has been the topic of significant debate.
The majority of courts that have considered the issue have determined that the failure to provide an annual escrow analysis constitutes a waiver of any right to recover a deficiency. See e.g., In re Dominque, 368 B.R. 913 (Bankr. S.D. Fla. 2007); In re Johnson, 384 B.R. 763 (Bankr. E.D. Mich. 2008). The Garza court agreed with the reasoning of these decisions.
The Garza Court also awarded the Homeowner’s $4,107.50 in attorney’s fees for creditor’s failure to provide required escrow analyses, holding as follows:
Where the mortgage creditor failed to provide the Chapter 13 debtor with the escrow analysis required under RESPA for 2008, 2009, 2010 and 2011, the court awarded the debtor $4,107.50 in attorney’s fees under new Bankruptcy Rule 3002.1. While only the creditor’s 2011 analysis was subject to Rule 3002.1, due to the rule’s December 1, 2011, effective date, it did not appear that the work performed by counsel was heavily dependent on the number of years in which the creditor asserted a deficiency.
In re Garza, 2012 WL 4738651 (Bankr. S.D. Tex., Oct. 1, 2012)