a national bankruptcy services publication looking...

a national bankruptcy services publication

Looking BackA Review of the Modified and New Bankruptcy Rules After One Year

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A review of the federal rule-making process

Interview with Bob Brasiel, developer

of PACT

INTRODUCING BUCKLEY MADOLE, P.C.

The new leadership team at Brice, Vander Linden & Wernick, P.C is pleased to announce

that the firm has changed its name effective March 1, 2013 to Buckley & Madole, P.C.

The firm gratefully acknowledges the many contributions of deceased founding

shareholder Bill Brice and those of the recently retired shareholders Lance Vander Linden

and Max Wernick. We are privileged to carry on the firm’s proud tradition.

NATIONWIDE DEFAULT MANAGEMENT LEGAL SERVICES

BUCKLEYMADOLE.COM 800.766.7751

P R OV I D I N G L E A D E R S h I P T h R O U G h PA R T N E R S h I P

BKMD_13_0002_Ledger_0313.indd 1 2/14/13 1:49 PM

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tHe ledgeRMARCH 2013

Larry Buckley

CeO

[email protected]

Brad Cloud

COO

[email protected]

Dave McManus

SVP

[email protected]

Tom Waters

VP

[email protected]

Contributing Writers

Hilary B. Bonial, Rich Haber, N. Robert

Henry, Anthony Risalvato, Vin Shortess

Magazine Design

hW creative, hWideas.com

The LeDger is a National Bankruptcy

Services publication.

© 2013 National Bankruptcy Services

All Rights Reserved

9441 lBJ Freeway, Suite 250

dallas, tX 75243

NBSdeFAultSeRViCeS.COM « MARCH 2013

INTRODUCING BUCKLEY MADOLE, P.C.

The new leadership team at Brice, Vander Linden & Wernick, P.C is pleased to announce

that the firm has changed its name effective March 1, 2013 to Buckley & Madole, P.C.

The firm gratefully acknowledges the many contributions of deceased founding

shareholder Bill Brice and those of the recently retired shareholders Lance Vander Linden

and Max Wernick. We are privileged to carry on the firm’s proud tradition.

NATIONWIDE DEFAULT MANAGEMENT LEGAL SERVICES

BUCKLEYMADOLE.COM 800.766.7751

P R OV I D I N G L E A D E R S h I P T h R O U G h PA R T N E R S h I P

BKMD_13_0002_Ledger_0313.indd 1 2/14/13 1:49 PM

the information in this publication is not a substitute for the advice of an attorney and is not legal advice.

A nATIonAL BAnkruPTCy servICes PuBLICATIon

iN this issue

Issues

A review of the federal rule-making process and bankruptcy rules/

forms changes.

2

foCus

An interview with Bob Brasiel, developer of the recently acquired

PACT software.

23

IF YOU ARE A CREDITOR, YOUR RIGHTS MAY BE AFFECTED

By Vin Shortess

the ledger » nbsdefaultservices.com

NATIONAL MODEL CHAPTER 13 PLAN

chapter 13 of the Bankruptcy Code provides for the adjustment of debts of an individual with regular income by permitting the debtor to re-pay all or a portion of his or her debts over a period of time specified in the confirmed Chap-

ter 13 plan. As such, creditors are acutely aware that in a chap-ter 13 bankruptcy case, protecting their interests from adverse treatment begins with an accurate and timely review of a

debtor’s proposed chapter 13 plan of debt repayment.These creditors also know, however, that every plan does

not look the same. There are 94 bankruptcy-court jurisdic-tions, and each utilizes a different variation of a plan. Fifty-six of these jurisdictions have implemented their own unique mandatory model plan in an effort to promote consistency and efficiencies within the administration of chapter 13 bank-ruptcy cases, but age-old questions still persist for creditors:


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nbsdefaultservices.com « marcH 2013

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Bankruptcy Filings by District 2012

Source: LCI 12/31/2012

Total 2012 YTD: 1,157,491

Western

Alaska

Kansas

California

Maryland

Delaware

Mississippi

New York

Idaho

Nevada

Oklahoma

Arizona

Louisiana

Connecticut

Michigan

Georgia

Montana

North Dakota

Indiana

New Jersey

Pennsylvania

South Dakota

Wisconsin

Vermont

Alabama

Kentucky

Colorado

Massachusetts

Florida

Missouri

North Carolina

Illinois

New Hampshire

Oregon

South Carolina

Washington

Utah

Arkansas

Maine

Washington DC

Minnesota

Hawaii

Nebraska

Ohio

Iowa

New Mexico

Rhode Island

Texas

Wyoming

Tennessee

West Virginia

Virginia

Central Eastern Main Northern Southern

7,649

99,336

44,25410,403

7,318

1,826

5,568

7,227

11,646

15,098

26,012

3,60143,417

54,93713,7952,323

5,483

8,007

25,5543,384

16,818

1,671

26,837

25,8848,016

8222,909

2,5106,132

8,793

2,94422,805

16,114

16,696

1,9395,61016,7133,841

29,7464,643

953

14,699

3,9297,8391,522

15,909990

1,222

4,419

16,865

30,4188,508

4,44520,8313,868

6,620

9,609

23,463

12,464

2,129

4,741

9,86810,106

11,651

11,251

5,8126,197

6,247

8,935

17,40410,538

6,73521,3776,910

7,42135,766

9,2503,745

36,329

13,859

15,9058,942

1,780

11,679

13,9486,051

21,9935,40717,992

739

DATA

A look at bankruptcy data from across the nation, with detailed state

by state breakdowns of filings.

16

tABle Of cONteNts

» NAtiONAl MOdel CHAPteR 13 PlANif you are a creditor, your rights may be affected 2

» lOOkiNg BACkA Review of the Modified and New Bankruptcy

Rules After One Year 4» i HAVe tO dO WHAt?

A look at Recent changes to Bankruptcy Rules & forms 8» A SuMMARy OF tHe CFPB’S SuPeRViSORy

HigHligHtS: FAll 2012implementing compliance-Management systems and

previously identified Violations of consumer financial law 12» By tHe NuMBeRS

taking a look at the state of bankruptcy 16» FOReClOSuReS iN NeW JeRSey

Overview of Recent changes to New Jersey

foreclosure landscape 20 » HOt SeAt

NBs Recently Acquired Mr. Brasiel’s Revolutionary

payment Automation software, pAct 23


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iF you are a creDitor, your riGHts May be aFFecteD

By vin shortess

tHe ledgeR » NBSdeFAultSeRViCeS.COM

NATIONAL MODEL cHapter 13 plan

Chapter 13 of the Bankruptcy Code provides for the adjustment of debts of an individual with regular income by permitting the debtor to re-pay all or a portion of his or her debts over a period of time specified in the confirmed Chap-

ter 13 plan. As such, creditors are acutely aware that in a chap-ter 13 bankruptcy case, protecting their interests from adverse treatment begins with an accurate and timely review of a

debtor’s proposed chapter 13 plan of debt repayment.These creditors also know, however, that every plan does

not look the same. There are 94 bankruptcy-court jurisdic-tions, and each utilizes a different variation of a plan. Fifty-six of these jurisdictions have implemented their own unique mandatory model plan in an effort to promote consistency and efficiencies within the administration of chapter 13 bank-ruptcy cases, but age-old questions still persist for creditors:

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How will the trustee pay the arrearage claim –per the amount in the proof of claim or the amount in the debtor’s plan? How can an objection to the debtor’s proposed pre-petition arrear-age be timely met when a proof of claim has not yet been filed? Does the plan contain terms to value or even strip the lien? Did the “other provisions” section of the plan sneak in an ad-verse term that will impair the claim?

In United Student Aid Funds, Inc. v. Espinosa, 130 S. Ct. 1367 (2010), Francisco J. Espinosa had taken out student loans to attend trade school. Years later he filed for bankruptcy protec-tion and proposed in his chapter 13 plan to repay the principal of his student loans over five years without interest. Five years later, after the successful completion of his plan payments, the bankruptcy court discharged the student-loan interest without the normally required adversary proceeding brought by a debtor proving an “undue hardship.” The U.S. Supreme Court held that “the bankruptcy court’s failure to find undue hardship before confirming Espinosa’s plan was a legal error, but the [plan confirmation] order remains enforceable and binding on United because United had notice of the error and failed to object or timely appeal.”

The Espinosa decision coupled with the above-mentioned questions started the clamor for the utilization of a national model plan to curtail future “legal error” from happening. Thus, a working group of various bankruptcy professionals (including bankruptcy judges, trustees and practitioners) has proposed a national model plan and determined “that amend-ments to bankruptcy rules would be helpful – if not essential – to an effective national form.” The draft plan and amend-ments to rules can be obtained at considerchapter13.org.

In December 2012, the National Association of Chapter Thirteen Trustees Academy for Consumer Bankruptcy Educa-tion (NACTT Academy) hosted a webinar discussing the pros and cons of the proposed chapter 13 national model plan and amendments to rules. The use of a national model plan is intended to be mandatory, just as the use of the schedules and the proof-of-claim form are mandatory.

The NACTT Academy discussed five advantages to, or argu-ments in favor of, the adoption of a national model plan:1. Data enabling can only be accomplished if there is a nation-

al form. Data enabling would allow the harnessing of a large amount of data to develop trends and recommend actions.

2. National creditors, trustees and judges will know where to

find non-standard provisions of the plan. This would assist trustees in solving problematic national trends.

3. A form may help reduce local variations in chapter 13 prac-tices, making the bankruptcy laws more uniform.

4. It will place form plans on a more solid legal footing because its use will not depend on a local rule or administrative order.

5. A form will create greater efficiencies and be less expensive.The NACTT Academy discussed four disadvantages to, or

arguments against, the adoption:1. Reduced local control. Can a one-size form plan fit all sce-

narios?2. The need to retool systems of checks and balances that are

“tried and true.”3. The time and costs of implementation.4. There is no problem that needs to be addressed.

In order to make a national model plan functional, amend-ments to specific bankruptcy rules are “essential.” The fol-lowing are brief summaries, provided by the NACTT Academy, of the proposed amendments:• Secured creditors would be required to file proofs of claim,

simplifying the process of obtaining an allowed secured claim.• The bar date for filing proofs of claim would be moved to 60

days after the petition date in order to sync with plan con-firmation, eliminating uncertainty about plan feasibility.

• The plan terms would control over contrary proofs of claim.• There would be new deadlines for objections to plan confir-

mation.• Lien avoidance would be accomplished through plan con-

firmation.• Orders declaring liens satisfied would be controlled by a

new rule.Now is the time for every creditor to consider the potential

opportunities and impacts with the proposed adoption of a national model plan and amendments to rules. Publication of these proposals for a public-comment period should occur in August 2013.

Here at NBS, regardless of whether these changes are imple-mented, we will remain steadfast in advising our clients on how their loan fits within the framework of a plan allowing them to make an informed decision as to the next step in the process, including whether they should object to the confirmation of the plan by the court. By representing you, we ensure that your rights and interests are fully protected and not impaired.

Melvin “Vin” Shortess, Jr. is an associate attorney at Buckley Madole,

P.C. with a primary focus on the real- property bankruptcy portfolio.

He is a graduate of Southern university law Center and earned an

ll.M. taxation degree at Southern Methodist university dedman

School of law. He is licensed to practice in louisiana and texas.


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B Y h i l A R Y B . B O N i A l

Looking BackA Review of the Modified and New Bankruptcy Rules After One Year

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on Dec. 1, 2012, Bankruptcy Rule 3001 was amended, and Rule 3002.1 was put into effect. the rules were accompanied by new official bankruptcy forms controlling proofs of claim, payment change notices, and notices of post-petition fees, costs and charges. the rules required an expanded disclosure of claimed amounts, payment changes and post-petition charges, and for creditors to respond to the chapter 13 trustee’s notice regarding the final cure payment. in the year since they have became effective, thousands of such documents have been filed by creditors and/or their counsel. these filings have generated litigation and case law to add color to the landscape the new rules and forms provided. the following is a summary of some of the relevant court opinions.

hilary B. Bonial serves as general counsel for National

Bankruptcy services, llc. and is of counsel for Buckley

Madole, p.c. she is certified by the American Board of

certification in consumer bankruptcy.

In re Carr 486 B.r. 806 (BAnkr. e.D. vA 2012)

The first widely circulated case came out of the Eastern District of Virginia. The case concerned the filing of a response to the trustee’s Notice of Final Cure Payment under Rule 3002.1. The rule requires creditors to respond, even if they agree with the trustee’s stance that that the debtor is current on the mortgage. In Carr, the creditor’s

attorney filed the response and noted that a $50 fee was incurred for doing so. The court ruled

that the creditor could not seek reimbursement for the fee from the borrower, and that the rule

does not require that an attorney file the response. The court likened the review of the

trustee’s notice and the production and filing of the response to the mere filling out of a simple form, and therefore no fees should be incurred by the borrower for the creditor’s compliance. If the creditor’s response noted that the borrower was delinquent and litigation ensued, the court noted that the creditor could charge legal fees.


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In re Adkins2012 WL 3860593 (BAnkr. n.D.

ohIo Aug. 10, 2012)

Rule 3002.1 was designed to handle the most prevalent types of home-purchase

agreements, but the time frames it imposes do not work for some lenders’ HELOC

(Home Equity Line of Credit) accounts. The Adkins case provides an example where the underlying loan’s payment amounts

varied from month to month and were not computed until just before the next payment was due. Rule 3002.1(b)’s requirements for payment-change

notification state the creditor must give the debtor at least 21-days notice of any

impeding post-petition payment change. The result was a situation where it was

impossible for the creditor to comply with the rule, so it moved the court to waive the

requirements for this particular case. Judge Woods reviewed the rule and noted that there was no provision allowing the

court to excuse compliance.

In re Wallett2012 WL 4062657

(BAnkr. vT. sePT 14, 2012)

The disclosure and recoverability of attorney fees incurred for the production, verification, and filing of a proof of claim has long been a troublesome issue in the bankruptcy arena. The Wallett decision assists in shedding some light as to the effect the new rules have on this long-standing issue. In this case, the creditor included the post-petition attorney fees for

the claim and review of the chapter 13 plan in the claim itself. The debtor objected, stating that the fees were

incurred post-petition and should not be included in the claim, which establishes the amount of the debt as of the

date of petition, and that the debtor was current on the mortgage at the time of filing. The Wallett court ruled that since the claim and plan review were performed post-peti-tion, the proper way to seek those fees was through Rule

3002.1’s notice of post-petition fees, costs and expenses. The purpose of the notice is to disclose any recoverable charges

incurred on the loan after the bankruptcy case is filed within 180 days, of their incurrence.

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In re Baca2012 WL 6647733 (BAnkr. n.M.

DeC. 20, 2012)

This case dealt with the trustee’s Notice of Final Cure Payment. The creditor filed a

response stating that the debtors were not current on their post-petition obligation

but understated the amount of delinquen-cy. At the hearing, the debtors argued that the creditor should be held to the amount

originally included in its response, as opposed to the actual amount of delin-

quency now being alleged. The court ruled that the creditor was limited to the amount

in its response.

In re Thongta2012 WL 5050669

BAnkr. e.D. WIs. oCT. 18, 2012

The ruling in Thongta involves an interpretation that may not have been anticipated or intended by the drafters of Rule 3002.1. The underlying issue surrounds the effect of a creditor achieving relief from the automatic stay on the requirements for

creditors to file payment-change notices, notices of post-petition fees and costs, and responses to a

trustee’s notice of final cure payment. Some courts have required that creditors continue to send such notices after the stay has been lifted. The facts in Thongta were that the creditor withdrew its claim

once the stay was lifted, and this proved to be pivotal in the court’s decision. Rule 3002.1 requires

creditors with claims secured by the debtor’s principal residence, which is being treated under §1322 of the Code to provide and respond to the notices. Since the claim was withdrawn and the

stay was lifted, the account was no longer under the auspices of the rule.

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WHat?A lOOk At ReCeNt CHANgeS tO

BANkRuPtCy RuleS & FORMS

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the Federal Rules of Bankruptcy Procedure (Rules), along with the Official Bankruptcy Forms (Forms), are subject to amendment each year, effective Dec. 1.1

While many changes go unnoticed by mortgage servicers and consumer creditors – either because they are relevant only to debtors or in corporate chapter 11 cases – changes taking effect in the past two Decembers have been very relevant to our industry.

tHe ruleMakinG processAmendments to the existing Rules and Forms, and the enact-ment of entirely new ones, come about neither easily nor on a whim. Rather, each change requires numerous layers of ap-proval culminating with the U.S. Supreme Court and a statu-tory seven-month period for Congress to reject, modify or defer enactment. In fact, changes can take two years or more to go into effect from the time first proposed.

The Federal Rules of Bankruptcy Procedure are one of five sets of federal rules – the others being Appellate, Civil, Crimi-nal and Evidence. As directed by the Rules Enabling Act of 1934, 28 U.S.C. § 2071-2077, each of these subject matters has an advisory committee (Advisory Committee) that works on rulemaking along with the Judicial Conference’s Committee on Rules of Practice and Procedure (Standing Committee). The Standing Committee and five Advisory Committees “carry on a continuous study of the operation and effect” of federal rules.

The federal rulemaking process involves seven steps: (1) proposed changes submitted to the Advisory Committee; (2) publication and public comment; (3) final approval by the Advisory Committee; (4) approval by the Standing Committee; (5) approval by the Judicial Conference; (6) approval by the Supreme Court; and (7) Congressional review.

First, the Advisory Committee collects, reviews and evalu-ates suggested rule changes. Proposals come from a variety of sources – judges, court clerks, lawyers, professors, govern-ment agencies, or other individuals and organizations. If the Advisory Committee elects to pursue a proposal, it may seek permission from the Standing Committee to publish a draft of the contemplated amendment. Based on comments from the bench, bar, and general public, the Advisory Committee may then choose to discard, revise, or transmit the amendment as contemplated to the Standing Committee.

Once the Standing Committee receives the findings of the Advisory Committee, it independently reviews those findings and, if satisfied, recommends changes to the Judicial Confer-

1. Information for this article was gathered and/or quoted from content and documents retrieved from the U.S. Courts’ website, www.uscourts.gov.

ence. Upon its approval, the Judicial Conference then formal-ly recommends changes to the Supreme Court for consider-ation. Finally, if the Supreme Court agrees with the proposed changes, it will officially promulgate the revised rules by order before May 1, to take effect no earlier than Dec. 1 of the same year. Congress then has a statutory period of at least seven months to act on the rules. Absent legislation to reject, mod-ify, or defer the rules or forms, they take effect as a matter of law on Dec. 1.

recent rule cHanGes aFFectinG MortGaGe servicers anD consuMer creDitorsBy now, mortgage servicers and other consumer creditors are well acquainted with the significant changes that went into effect on Dec. 1, 2011. Most notably, Rule 3001(c), gov-erning proofs of claim, was amended to require an itemized statement of interest, fees, expenses or other charges be filed with a proof of claim in an individual debtor’s case. If a se-curity interest is claimed in the debtor’s property, a state-ment must also be included giving the amount required to cure any default. If the property involved is the debtor’s principal residence, the proof of claim must attach, and give the information required by, a new official form addressing this rule change, and also must include information related to any escrow account. New Rule 3002.1, related to claims secured by a chapter 13 debtor’s principal residence, sets forth a number of additional requirements when the claim is provided for under section 1322(b)(5) of the Bankruptcy Code. The new rule details required information related to post-petition fees, expenses, and charges, as well as proce-dures for determining those amounts and the final cure amount.

Additional amendments to the proof of claim process for open-end or revolving consumer credit agreements became effective Dec. 1, 2012. When the claim is based upon a writing, the amendments to Rule 3001(c)(1) exempt holders of open-end or revolving consumer credit agreements from filing a copy of the writing on which the claim is based with the proof of claim. However, if a party in interest requests a copy of the writing, the holder of the claim must provide the writing within 30 days of the request. This deadline may be extended for cause under Rule 9006.

Even though the underlying writing upon which the claim is based will no longer be required in connection with claims based on an open-end or revolving consumer credit agree-ment, Rule 3001(3)(A) provides certain additional require-ments for these claims, except when the agreement is se-

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cured by the debtor’s principal residence. These additional requirements are that each proof of claim must include:• the name of the entity from whom the creditor purchased

the account;• the name of the entity to whom the debt was owed at the

time of an account holder’s last transaction on the account;• the date of an account holder’s last transaction;• the date of the last payment on the account; and• the date on which the account was charged to profit or loss.

It is expected that this additional information will assist the debtor with identification of the particular account upon which the claim is based and ascertaining the timeliness of the claim.

While compliance with Rule 3001(a), (b), (c)(1), (c)(2), (c)(3)(A), and (e) will be prima facie evidence of the validity of an open-end or revolving consumer credit agreement claim de-spite the fact that the writing upon which the claim is based may not have been received or requested by a party in interest, failure to comply with the new amendments could expose creditors to sanctions.

Also effective Dec. 1, 2012, were minor changes to Official Form 10 (Proof of Claim), which was amended at section seven to remind filers to attach the documents required by Rule 3001(c) for claims based on an open-end or revolving consumer credit agreement or claims secured by a security interest in the debtor’s principal residence. Section eight was revised to delete a direction requiring an authorized agent to attach a power of attorney if one exists, as Rule 9010(c) spe-cifically excepts proofs of claim from such a requirement.

penDinG rule proposals After all of the Rule and Form changes affecting mortgage servicers and consumer creditors in 2011 and 2012, it ap-pears those entities can breathe easy for the foreseeable future. Between Aug. 15, 2012, and Feb. 15, 2013, was a public-comment period for proposed amendments to Rules 1014(b), 7004(e), 7008, 7012, 7016, 7054, 8001-8028, 9023, 9024, 9027, and 9033 and Forms 3A, 3B, 6I, 6J, 22A-1, 22A-2, 22B, 22C-1, and 22C-2, none of which will impact the day-to-day operations of mortgage servicers and consumer

creditors. Most of the rule changes were proposed in re-sponse to the Supreme Court’s decision in Stern v. Marshall, 131 S. Ct. 2594 (2011). In Stern, the Court held that a non-Article III bankruptcy judge could not enter final judgment on a debtor’s common-law counterclaim brought against a creditor of the bankruptcy estate. The proposed rule chang-es seek to avoid potential confusion by removing the terms “core” and “non-core” from Rules 7008, 7012, 9027, and 9033, require parties to state whether they do or do not con-sent to entry of final orders or judgment by the bankruptcy judge, and direct bankruptcy courts to decide the proper treatment of certain proceedings. While these rules could come into play during an adversary proceeding or other sig-nificant bankruptcy litigation, they will generally have no bearing on mortgage servicers and consumer creditors.

As for the Official Form proposals that shared the Aug. 15, 2012, to Feb. 15, 2013, public-comment period with the above-referenced rule amendments, these too will have little or no impact in the creditor space, although they do represent the first proposed modernization of debtors’ filing forms in 20 years. The impacted forms are debtor-filed documents per-taining to Filing Fees (3A and 3B), Statements of Income and Expenditures (6I and 6J), and Statements of Monthly Current Income (22A-1, 22A-2, 22B, 22C-1, and 22C-2).

Similar to those proposals for which the public-comment period just expired, it does not appear that any of the propos-als currently with the Supreme Court for approval will have a significant impact on our industry either. The proposed amendments to Rules 1007(b)(7), 4004(c)(1) and 5009(b) pro-vide technical clarifications regarding a debtor’s obligation to take a financial-responsibility course before obtaining a discharge, and proposed changes to Bankruptcy Rules 9006(d), 9013 and 9014 provide clarification regarding the response time to motions. If approved by the Supreme Court prior to May 1, 2013, these proposed amendments will take effect on Dec. 1, 2013, absent Congressional action.

NBS will regularly report in the Ledger or Proceedings re-garding proposals, comments and any action on the Rules or Forms affecting our industries. Please contact us with any questions you may have.

rich Haber is a shareholder with Buckley Madole, P.C. His career spans over 15 years in

mortgage default servicing, both in private practice and in-house at a national mortgage

servicer. He works in the firm’s iselin, N.J., office and is a managing Attorney for the

Northeast Region.


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A Summary of the CFPB’s supervisory Highlights

f A L L 2 0 1 2

implementing compliance-Management systems and previously

identified Violations of consumer financial law

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By N. Robert Henry


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On Oct. 31, the Consumer Fi-nancial Protection Bureau (CFPB) released its Supervi-sory Highlights Report for Fall 2012, which addresses the work of the CFPB be-tween July 2011 and Sept. 30, 2012. The report identi-

fies various actions the CFPB has taken, highlights current issues and problems facing consumers, and provides helpful guidance for operators of financial institutions of all sizes.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the CFPB re-ceived the authority to supervise many consumer financial products and services previously under the control of other federal agencies. As a result, the CFPB has the authority to examine depository institutions with over $10 billion in assets, includ-ing their affiliates, as well as certain nonbank or-ganizations that offer services such as residential mortgage loans, payday loans, and private student loans. The CFPB’s report emphasizes a focus on consumers through transparent, consistent, data-driven reviews and assessments. The first half of the report emphasizes the importance of compli-ance-management systems, while the remainder discusses various significant violations by credit-card issuers, related to credit reporting, and by mortgage servicers.

According to the report, an effective compliance-management system should be “designed to ensure that the financial institution’s policies and prac-tices are in full compliance with the requirements of Federal consumer financial law.” Specifically, the report states that an effective compliance-manage-ment system should tackle internal controls and oversight, training, interval monitoring, consumer-complaint response, independent testing and audit, third-party service provider oversight, recordkeep-ing, product development and business acquisition, and marketing practices. While managing the com-pliance of small entities with a narrow range of fi-

nancial products will be different from that of a large financial institution, the CFPB “expects com-pliance management activities to be a priority and to be appropriate for the nature, size, and complex-ity of the financial institution’s consumer busi-ness.” Essentially, the CFPB persuades that compli-ance should be a top priority throughout the operation, regardless of size or detail. In its super-visory role, the CFPB has found multiple scenarios where compliance-management systems were de-ficient across an entire portfolio including wide-spread inability to identify and address resulting risks. The report notes that many of these problems stem from failing to adopt comprehensive policies, a lack of communication with employees, and insuf-ficient resources to ensure compliance.

Additionally, the CFPB states that while the use of third-party service providers and affiliates is often a reasonable business decision, the oversight and supervision of servicers is essential to proper com-pliance management. Organizations need to ensure that the risks of servicing relationships are managed and to remember that the “responsibility for legal violations by a service provider may lie with the fi-nancial institution as well as with the service pro-vider.” Failure to coordinate correspondence prop-erly serves as a classic example of the potential risks involved with servicers and affiliates and illustrates how easily one can be in violation of federal law without proper oversight. Like most business rela-tionships, clear and accurate communication is of utmost importance.

The second half of the report discusses detected violations of consumer financial law. According to the report, financial institutions have provided remedial relief to 1.4 million consumers and have adopted procedures to ensure violations do not oc-cur, amongst other improved practices. In address-ing credit-card issuer violations, the CFPB has taken both public enforcement and non-public supervisory actions. Capital One Bank (U.S.A.) N.A., Discover Bank, and American Express have faced public enforcement actions to correct various

A Summary of the CFPB’s supervisory Highlights

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illegal practices such as add-on products, mis-leading consumers regarding fees or benefits, re-taining customers attempting to cancel such prod-ucts, and other similar offenses. For non-public supervisory actions, the CFPB has looked to viola-tions of the Credit Card Accountability Responsi-bility and Disclosure Act of 2009 (CARD Act). The CARD Act attempts to protect consumers from various unfair credit card practices such as mis-leading terminology, certain interest rate increas-es, and excessive late fees. The CFPB has directed that policies ensuring compliance be established to rectify failures to comply with requirements of the CARD Act.

In relation to credit reporting, under the Fair Credit Reporting Act (FCRA), the CFPB may exam-ine financial institutions for compliance. The FCRA requires written policies and procedures regarding the accuracy and integrity of consumer information provided to credit bureaus. The CPFB notes that examiners have found multiple in-stances of insufficient training or understanding of the FCRA, and as a result, financial institutions have been unaware of, and have repeatedly failed to respond to, consumer communications. As a result, proper training and education of employ-ees is critical to staying within the requirements of the FCRA.

Lastly, the CFPB discusses serious violations by mortgage originators. Under the Real Estate Settlement Procedures Act (RESPA), residential mortgage lenders are required to provide consum-ers with timely disclosures regarding the costs of the real estate settlement process, and the Truth-in-Lending Act (TILA) prohibits guiding a con-

sumer toward a loan to increase the originator’s compensation, unless the loan is otherwise in the consumer’s interest. CFPB examinations have revealed “significant non-compliance with these statutes” and have found incorrect and inade-quate completions of the good-faith estimate and HUD-1 settlement statements. Furthermore, orig-inators have failed to provide accurate interest rates, payment schedules and various disclo-sures. Institutions found in violation have been directed to implement proper policies, procedures and monitoring to prevent future violations. In some situations, organizations have been direct-ed to provide consumers with a corrected HUD-1, and where customers have been erroneously charged, organizations have been directed to pro-vide reimbursement. The CFPB also emphasizes the importance of being in compliance with the Home Mortgage Disclosure Act (HMDA) so that regulators and the public can compare mortgage data “in a meaningful way” and has taken mea-sures to ensure that organizations work to im-prove their data collection and reduce errors.

In conclusion, the CFPB’s Supervisory Highlights Report examines institutional compliance with consumer laws and seeks to reduce consumer risks throughout the country. It is expected that the CFPB will periodically publish additional supervi-sory highlights to address concerns while main-taining the anonymity of institutions examined. As the CFPB points out, now is the time for financial institutions to establish effective compliance-man-agement systems, ensure proper supervision of servicers, and uphold full compliance with con-sumer protection laws.

n. robert henry is an associate attorney with Buckley Madole, p.c., in its

dallas office. he graduated from southern Methodist university dedman

school of law in 2011 and the university of kansas in 2008. he is licensed to

practice in texas.

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Data

< 100

200-300

100-200

>300

D.C.

NAtiONAl AVeRAge (-14.0)137.2

StateFilings Per

CapitaPercent Change1

Nevada 7.69 -3.41

Georgia 7.10 -0.82

California 6.2 -0.71

Tennessee 6.19 -1.67

Alabama 5.47 -1.69

Michigan 5.23 -1.47

Illinois 5.02 -1.23

Utah 4.92 -1.53

Arizona 4.73 -1.58

Kentucky 4.57 -1.03

StateFilings Per

CapitaPercent Change1

Alaska 1.10 -0.48

District of Columbia 1.40 -0.74

South Dakota 1.45 -0.99

Vermont 1.51 -1.11

South Carolina 1.54 -0.50

North Dakota 1.71 -0.76

New York 1.78 -1.06

Wyoming 1.81 -0.98

Montana 1.92 -1.11

Iowa 1.95 -1.26

dAtA

StateHouseholds

per filingPercent Change1

utah 55.6 -11.6%

georgia 56.1 -12.6%

tennessee 57.4 -6.4%

Nevada 58.8 -28.2%

Alabama 67.9 -8.6%

California 70.1 -23.3%

illinois 71.0 -6.2%

indiana 71.3 -8.8%

Colorado 76.3 -12.9%

Michigan 78.6 -14.4%

StateHouseholds

per filingPercent Change1

texas 192.9 -7.4%

West Virginia 193.5 -17.5%

iowa 196.5 -20.3%

Montana 208.5 -17.6%

South dakota 212.4 -16.9%

South Carolina 225.6 -1.8%

Vermont 260.0 -12.4%

North dakota 297.4 -22.1%

Washinton d.C. 326.8 -10.8%

Alaska 348.2 -25.1%

AS OF deC 2012; PeRCeNt CHANge BASed ON COMPARiSON OF 2012 FiliNgS VS PReViOuS yeARSource: lCi 12/31/2012

2012 ytd StAte-By-StAte HOuSeHOldS PeR FiliNg

tOP 10 BOttOM 10

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StAte-By-StAte tOtAl 2012 BANkRuPtCy FiliNgSANd PeRCeNtAgeS OF CHAPteR 7 VS. CHAPteR 13

State total 2012 Chapter 7 Filings Chapter 13 Filings

Alaska 739 82.9% 16.9%

Alabama 27,166 37.3% 62.6%

Arizona 26,837 85.6% 13.8%

Arkansas 12,162 51.0% 48.8%

California 177,979 74.8% 24.8%

Colorado 25,884 82.8% 17.0%

Connecticut 8,016 87.0% 12.5%

Washington dC 822 85.5% 13.3%

delaware 2,909 71.1% 28.9%

Florida 78,273 72.6% 27.1%

georgia 62,328 48.1% 51.7%

Hawaii 2,510 75.8% 24.0%

idaho 6,132 89.0% 10.7%

illinois 66,700 70.4% 29.5%

indiana 34,626 72.2% 27.7%

iowa 6,191 90.8% 9.1%

kansas 8,793 64.5% 35.3%

kentucky 19,118 72.4% 27.4%

louisiana 15,677 34.1% 65.7%

Maine 2,944 85.7% 13.8%

Maryland 22,805 80.5% 19.3%

Massachusetts 16,114 74.4% 25.2%

Michigan 47,980 82.9% 17.0%

Minnesota 16,696 82.9% 17.0%

Mississippi 12,103 50.6% 49.2%

Missouri 25,110 72.1% 27.8%

Montana 1,939 82.6% 17.0%

Nebraska 5,610 69.9% 29.9%

Nevada 16,713 81.0% 18.0%

New Hampshire 3,841 75.5% 24.4%

New Jersey 29,746 78.0% 21.7%

New Mexico 4,643 91.2% 8.4%

New york 39,333 84.1% 15.7%

North Carolina 20,707 43.1% 56.5%

North dakota 953 88.9% 10.9%

Ohio 49,017 76.4% 23.6%

Oklahoma 11,411 83.5% 16.3%

Oregon 14,699 79.0% 20.9%

Pennsylvania 27,841 68.1% 31.6%

Rhode island 3,929 84.6% 15.3%

South Carolina 7,839 43.2% 56.5%

South dakota 1,522 90.5% 9.3%

tennessee 42,998 45.2% 54.6%

texas 45,871 43.1% 56.7%

utah 15,909 67.4% 32.4%

Vermont 990 79.8% 19.9%

Virginia 28,728 64.2% 35.7%

Washington 26,784 80.1% 19.6%

Wisconsin 24,832 76.0% 23.8%

West Virginia 3,800 86.8% 13.1%

Wyoming 1,222 85.6% 13.8%

total States and dC 1,157,491 69.4% 30.4%

2012 ytd as of dec 31, 2012.


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Bankruptcy filings by District 2012total 2012 ytd: 1,157,491

Western

Alaska

kansas

California

Maryland

delaware

Mississippi

New york

idaho

Nevada

Oklahoma

Arizona

louisiana

Connecticut

Michigan

georgia

Montana

North dakota

indiana

New Jersey

Pennsylvania

South dakota

Wisconsin

Vermont

Alabama

kentucky

Colorado

Massachusetts

Florida

Missouri

North Carolina

illinois

New Hampshire

Oregon

South Carolina

Washington

utah

Arkansas

Maine

Washington dC

Minnesota

Hawaii

Nebraska

Ohio

iowa

New Mexico

Rhode island

texas

Wyoming

tennessee

West Virginia

Virginia

Central eastern

7,649

99,336

44,25410,403

7,318

1,826

5,568

7,227

11,646

4,741

9,86810,106

11,651

11,251

5,8126,197

6,247

8,935

17,40410,538

6,73521,3776,910

7,42135,766

9,2503,745

36,329

13,859

15,9058,942

1,780

11,679

13,9486,051

21,9935,40717,992

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Source: lCi 12/31/2012

Main Northern Southern

15,098

26,012

3,60143,417

54,93713,7952,323

5,483

8,007

25,5543,384

16,818

1,671

26,837

25,8848,016

8222,909

2,5106,132

8,793

2,94422,805

16,114

16,696

1,9395,61016,7133,841

29,7464,643

953

14,699

3,9297,8391,522

15,909990

1,222

4,419

16,865

30,4188,508

4,44520,8313,868

6,620

9,609

23,463

12,464

2,129

739


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for more than two years, uncertainty has been the only thing certain when it comes to New Jersey foreclosures. Cases that were pending when the affidavit crisis first surfaced in the fall of 2010 are still stuck in purgatory, while new filings were halted – both actually and then de facto – for well over a year. While servicers and law firms have spent countless hours adapting to the “new normal,” it appears that New Jersey may finally be poised to return to a semblance of normalcy for newly filed foreclosures.

JuDicial response to tHe

aFFiDavit crisis

As soon as the first news of affidavit irregulari-ties broke in September 2010, the Office of Fore-closure (OFC), a centralized office that processes all uncontested foreclosures in New Jersey, stopped processing foreclosures for those enti-ties whose questionable practices had been pub-licized. For approximately three months, ser-vicers and their counsel awaited official word from the Judiciary as to how the crisis would be addressed. While the parties were told to expect the Judiciary to address the crisis, it took no of-ficial action until Dec. 20, 2010. The OFC all but

shut down during that waiting period, not want-ing to take any action until getting instructions from judicial superiors.

Then, on Dec. 20, 2010, the Judiciary un-leashed a series of actions designed to ensure the integrity of foreclosures processed in the Superior Court. One action it took was issuing an order to show cause directed at six specific “fore-closure plaintiffs” who had deposition testimony or other public questions as to the reliability of their documents – Wells Fargo, Bank of America, JPMorgan Chase, CitiMortgage, GMAC/Ally and OneWest (Order to Show Cause). The concept of “foreclosure plaintiffs,” along with a lack of un-derstanding by the Judiciary of mortgage servic-ing, the role of the servicer, and why a particular entity is the named plaintiff in a given action, are issues that significantly hampered the reach-ing of mutual understandings between servicers and the Judiciary.

Another action taken by the Judiciary on Dec. 20, 2010, was issuing an administrative order directed at the 24 “foreclosure plaintiffs” who, other than the six named in the Order to Show Cause, had filed at least 200 foreclosure com-plaints in 2010 (Administrative Order). Among

FOrEcLOsurEs IN NEw JErsEy Overview of Recent Changes to New Jersey Foreclosure landscape

Anthony Risalvato is

a shareholder with

Buckley Madole,

P.C. He is admitted

to practice in New

Jersey and New

york and practices

in the area of

mortgage default

servicing. He works

in the firm’s iselin,

N.J., office and is

Managing Attorney

for the Northeast

Region.

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the entities that were required to make submissions to a special master setting forth their foreclosure and document execution practices were Fannie Mae, Freddie Mac, MERS, and numerous trustees who do not service loans, such as Deutsche Bank and Bank of New York – further demonstrating the Judiciary’s lack of appreciation for the difference between the named plaintiff and the mortgage servicer.

A third action taken by the Judiciary on Dec. 20, 2010, was the implementation of emergent rule amendments requiring that counsel in residential foreclosure actions file with the complaint and final judgment application a “certification of diligent in-quiry” (CODI). In the CODI, foreclosure counsel must attest “that the attorney has communicated with an employee or employees of the plaintiff who (a) per-sonally reviewed the documents being submitted and (b) confirmed their accuracy.” Rule 4:64-1(a)(2). This rule also requires an identification of “the name(s), title(s) and responsibilities in those titles of the plaintiff’s employee(s) with whom the attorney communicated” and a further attestation from fore-closure counsel that the complaint and all docu-ments annexed thereto comport with the require-ments of Rule 1:4-8(a) (New Jersey’s state court equivalent of Federal Rule of Civil Procedure 11).

aFterMatH FroM tHe JuDicial response

The Order to Show Cause issued to the six servicers was resolved between the servicers and representa-tives of the Judiciary, and Judge Mary C. Jacobson entered an order approving the settlement on March 29, 2011. The settlement called for the appointment of retired Judge Richard Williams as a special master and the following two-phase approach. First, each servicer would make a prima facie showing to Judge Williams that it has process and procedures in place to ensure the integrity of its foreclosures, including the execution of affidavits and certifications based on personal knowledge. Once Judge Williams was satisfied that a given servicer has made its prima fa-cie showing, he was to recommend to Judge Jacobson that she permit that servicer to resume processing foreclosures. The second phase of the settlement gave Judge Williams review and oversight authority for a one-year period beginning when the servicer resumed the processing of foreclosures.

In August and September 2011, each of the six ser-vicers was cleared to resume the processing of un-contested foreclosures, after having made their pri-ma facie showings. However, literally a week before the first servicers were cleared to proceed, the Appel-late Division’s ruling in Bank of New York v. Laks, 422

By ANtHONy RiSAlVAtO


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N.J. Super. 201 (App. Div. 2011) cast doubt and un-certainty over all foreclosure actions pending in the state. In Laks, the court held that the statutory pre-foreclosure “notice of intention to foreclose” (NOI), required by New Jersey’s Fair Foreclosure Act, must include the name and address of the investor. Since the enactment of the Fair Foreclosure Act in 1995, it had been customary for the notice to include only the name and address of the servicer – the entity to whom the borrower could contact for loss mitigation or to dispute the default. Now, thousands of pending fore-closures were predicated on potentially faulty pre-foreclosure notices.

The Laks decision was thereafter addressed by the Supreme Court on an expedited fashion in a different case with the same issue, U.S. Bank v. Guillaume, 209 N.J. 449 (2012). The court in Guillaume confirmed the Laks ruling as to the inclusion of the name and ad-dress of the investor, but said that a faulty NOI did not necessarily require dismissal of the case. Rather, a judge reviewing the case could fashion an equitable remedy, such as requiring a remedial NOI to be issued while the foreclosure was pending. In April 2012, the court issued an implementation order as to its Guil-laume ruling, allowing servicers to bring an order to show cause for remediation of NOIs in a bulk fashion. Essentially, the servicer would serve the borrower with the remediated NOI and the order to show cause, and on the return date, if the court is satisfied, it could bless the remediation and allow the foreclosure to thereafter proceed.

It is now close to a year since the Supreme Court of New Jersey issued the Guillaume implementation or-der, yet most servicers have not completed the NOI remediation process. Certain items that the court wanted included in the remedial letter required ser-vicers to generate them manually, and many ser-vicers had difficulty correctly arriving at an appropri-ate amount due for use in the remedial NOI because servicing systems are not generally designed to create breach letters on loans that are three to five years de-linquent, in some cases more.

Despite the issues still swirling around pending cases, new matters seem to be moving fairly well. The Administrative Order has been closed and the emergent rules regarding the CODI requirement were amended to allow for the communication to occur

between foreclosure counsel and an employee of the plaintiff’s servicing agent (compliance with the original requirement of communication with an em-ployee of plaintiff was impractical and often impos-sible, as the servicer, not the plaintiff maintains the appropriate business records). Although the CODI has been required for over two years, it is still some-what in its infancy because the vast majority of files have not progressed.

lookinG aHeaD

From the servicer side, it seems like things are gener-ally in order. Most, if not all, have cured their tem-plate NOI to ensure that the appropriate information is set forth going forward, and practices around chain of title, confirming possession of the original note, and document execution have been tightened up.

Although new files seem to be moving well, there are still many unknowns that could cause further delay. One big question is how the sheriffs’ offices will deal with the resumption of mass foreclosure sales – most laid off the majority of their sales staff because the income derived from their commissions dried up. Also unclear is how the OFC – which had enormous systemic issues and backlogs before the affidavit cri-sis – will respond once files are coming at it in full force. Some servicers still have not resumed filing new matters, and many have not turned the nozzle to full force in cautiously addressing backlogs. More-over, it is unknown how the OFC will handle move-ment on pending cases as more and more servicers get orders allowing remediation of NOIs pursuant to Guillaume. Finally, it remains to be seen what impact, if any, will be had by the state’s new law, effective March 1, 2013, which allows for a summary foreclo-sure procedure for vacant and abandoned property.

One thing that is certain is that the “foreclosure mill” approach will no longer be tolerated in New Jersey. The Judiciary expects the same care and con-sideration from counsel in foreclosure matters that it does from counsel other types of matters. While ev-eryone benefits from efficiency, speed can no longer trump accuracy, quality and professionalism. Ser-vicers and their regulators demand the same as well. As a result, law firms in New Jersey, and all across the country, must alter their mindset and processes, or be left behind.

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bob brasiel became a member of

National Bankruptcy Services’ executive

management team after NBS acquired his

software technology, PACt. A dedicated

data advocate, Brasiel has delivered

several successful national deployments

to the default industry including, National

data Center [13datacenter.com], the pre-

eminent source of national chapter 13

data, and PACt [easiestwaytoimprovebk.

com], a chapter 13 automated payment

and claims-tracking software solution

that delivers hands-off intelligent posting

of chapter 13 trustee funds and hassle-

free servicer ledger balancing of claims

in bankruptcy.

Brasiel was responsible for the

design, development and delivery

of the National data Center (NdC),

including both technical and business

infrastructure. NdC is a national data

aggregator, consolidating information

from 200 chapter 13 trustees into a

single, secured national repository of

live data. NdC has become the trustees’

crowning achievement, second only to

their national organization, the National

Association of Chapter thirteen trustees.

For eight years, Brasiel represented NdC

within the default community, acting

as its Consulting Chief executive and

Operating Officer. He stepped down in

February 2012.

Brasiel brings nearly a decade of

experience focused solely on servicer-

payment application, along with a

career that spans over 25 years in data

management, professional services

and information technology. Bob has

earned several patents in the area of

bankruptcy, including System And

Method For Management and Processing

of Bankruptcy Claims and Payments

and System and Method For Payment

Allocation and Processing of Bankruptcy

Claims (pending).

Over h is career, Bras ie l has

contributed to several successful

technology startup companies, playing

key roles in senior management. two of

these companies were ranked among the

fastest-growing privately held companies

in the u.S., according to inc. Magazine in

1995, 2000, 2001 and 2002.

He earned both an MBA and

bachelor of science degrees from Saint

Mary’s College of California. He was a

certified instructor in the university of

California, Berkeley extension program,

teaching data-management concepts

and holds a California CC teaching

Credential. Brasiel has guest lectured at

the executive information technology

leadership Program at Santa Clara

university and spoken at numerous

default industry conferences.

nbs Welcomes bob brasielNBS Recently Acquired Mr. Brasiel’s Revolutionary

Payment Automation Software, PACt

iNteRVieWeR: lARRy BuCkley


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The LeDger: Tell us about your-self, Bob.

BB: I was raised amongst the orchards of Northern California in the ’60s, about 25 miles outside of San Fran-cisco. I loved sports, playing on any team that would take me. My introduc-tion to business was a paper route that introduced me to the entire neighbor-hood. Mom was an elementary school teacher, and Dad was an entrepre-neur, before the term was truly coined. I definitely learned my work ethic from my parents. I have been married to Michelle, my high school sweetheart, for 25 years. We have two beautiful kids. Meghan is a freshman at Denver University, and Brandon entered into De La Salle High School this year. My work family, the PACT Product Team, includes Catherine, Rick, Shahnaz and Joe.

The LeDger: How did you become interested in the field of bankruptcy?

BB: Not a short answer, Larry. Suffice it to say, I find the development of de-fault technology fascinating. I was teaching a class in the evening at CAL, while managing a professional ser-vices company by day. A student en-rolled in the program contacted me. She was running a non-profit company started by chapter 13 trustees. Her boss, a chapter 13 trustee, asked to have a meeting with me. He shared the trustees’ idea of delivering chapter 13 system-of-record information to the servicer community. Apparently the concept had been presented in a study

commissioned by the Clinton adminis-tration, but trustees were challenged to define and deliver. After reviewing the Study in Financial Privacy in Bank-ruptcy, I was taken by the possibilities of delivering this national solution. After a year of continuous work, my team proudly delivered the National Data Center to the default community. Following our success, the trustees asked me to take on the task of building their non-profit company, a trusted role that I cherished. I will forever be grate-ful to the chapter 13 trustees, my dedi-cated staff and data partners, Satori & Associates and Bill Scura, EPIQ, Com-pu Management and BSS - all profes-sionals and masters of their craft.

I had the opportunity to continue to advance my ideas in bankruptcy data management. With the support of an industry visionary, I delivered PACT, a bankruptcy payment automation suite of tools that has revolutionized pay-ment application in the default world. I have really enjoyed these successes. Most of all, it has been quite satisfying delivering technology that people sug-gested could not be built.

The LeDger: As an Executive Vice President, what type of work have you been or will you be doing?

BB: Of course, my primary focus is always the client, so I plan to spend quality time with our clients. I may be reaching that executive platinum status quicker than I had anticipated this year! I look forward to working closely with you, Brad Cloud and the

Board to differentiate our company through compliance excellence, ad-vanced technologies and industry thought leadership.

Demand is high for payment-applica-tion solutions, which should take the lion’s share of my time. As we ramp up client project deployments with the newly acquired PACT and NBS’s technology, Payment Analyzer, I plan to develop the Continuous Compli-ance Model in Bankruptcy™. This model will integrate NBS’s world class servicing platform by marrying workflow, rules management, pay-ment analytics and data automation for servicers.

Some clients have expressed a desire to replicate NBS’s full-service offer-ings within their operations. I will guide our team to deliver a suite of advanced technology solutions as products that clients may easily inte-grate into their environments. These tools promise to deliver required data integrity, data quality, reconciliation and repeatability.

The LeDger: What do you do in your free time?

BB: Well, I don’t have a lot of free time these days, and plan to have even less as I contemplate splitting time be-tween California and Texas. Any free time is spent with my family, whether that is enjoying a nice pinot in Napa with my wife, watching my son play rugby, taking in a Warrior game, tracking my car or catching a quick Skype with my daughter.

» continueD

our MIssIon Is sIMPLe. We strive to improve the

bottom line performance of our clients’ bankruptcy

portfolios through careful, efficient, and client-specif-

ic management of each individual case.

NBs provides nationwide bankruptcy management

services to the following types of organizations:

* Residential Mortgage lenders

* Automobile finance companies

* Banks and financial institutions

* consumer lending Organizations

* portfolio servicers, Owners, and investors

NBs is a leader in bankruptcy servicing for the

consumer finance industry. NBs is a subsidiary of

Advent international.

ABOut NBS

WWW. n B s D e fAu LTs e rv I C e s .Co M

SeRViCiNg uPdAteS NBS ANNOuNCeS ACquiSitiON OF PAyMeNt

APPliCAtiON teCHNOlOgy (PACt)

NBs is pleased to announce the acquisition of Northern

california-based Valley of the Moon Royalties, a software

and services provider specializing in chapter 13 trustee

payment transaction analytics.

Valley is best known in the default industry for its

revolutionary default software technology known as

pAct, which combines both servicer data and chapter 13

trustee case information in an automated and interactive

tool. pAct removes the manual processing and decision

making of today’s servicing environments and provides

mortgage, other collateral servicers or federal and state

municipalities the ability to automate payment posting

and exception reporting on the activity of loans and

accounts in bankruptcy. Bankruptcy managers and

cash managers have enjoyed huge productivity gains,

significantly improved data quality, visibility and social

responsibility, while reducing risk.

the combination of pAct’s abilities with National

Bankruptcy services’ portfolio-based bankruptcy

management expertise is a natural fit that will provide

NBs’ clients with enhanced compliance and the effective

use of trained resources to handle escalated issues

without losing focus on the day-to-day operational

tasks. the joint offering allows transparency into the

payment application process during active bankruptcy

cases to ensure compliance with regulatory agencies

and bankruptcy law. this technology further enhances

a suite of NBs technologies focused on compliance and

reconciliation.

default executives can directly address federal

requirements by integrating pAct into their workflow.

pAct addresses Occ consent Order requirement

Article Xi, section (k), can provide payment history, ftc

reporting, debtor reporting and will eliminate concerns

about adherence to u.s. Bankruptcy code 524(i). pAct

serves all collateral types, including secured, unsecured

and priority.

If you would like to recommend a colleague receive complimentary future issues of The Ledger and our monthly email perspective, Proceedings, please submit your email address to the Newsletter Signup field on our Website: nbsdefaultservices.com.

nbs traDesHoW presence NBS continues to take an active role at many of the

industry’s top events. Most recently, NBS participated at

the AFSA Vehicle Finance Conference & expo in Orlando,

Fl and the MBA National Mortgage Servicing Conference

& expo in grapevine, tX.

look for NBS next at these conferences:

• cBA live, March 11-13, phoenix, AZ

• Auto finance Risk summit (AfRs), April 29-30, dallas, tX

• collection & Recovery solutions conference (cRs), May

8-10, las Vegas, NV

• NAf Association Non-prime Auto financing conference,

June 5-6, fort Worth, tX

NBS NeWS deSk

to learn more about NBs and our free portfolio help assessment offer, please visit our website and watch our brief introduction video.

legAl BRieFS

Introducing Buckley Madole, P.C.

in acknowledgement of the passing of Bill Brice and the

retirement of lance Vander linden and Max Wernick, the

law firm of Brice, Vander linden & Wernick, p.c. (BVW)

has changed the name to Buckley Madole, p.c., effective

March 1, 2013. A formal announcement of the change has

been sent out to all clients and constituents.

new Jersey office opened february 11

Buckley Madole is excited to announce the continued

expansion of its footprint into the Northeast region.

formal operations at the New Jersey office commenced

on february 11, 2013. the Managing Attorneys are Rich haber and Anthony Risalvato.

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