Lender’s fee for filing proof of claim significantly reduced

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Where a lender sought to recover $650 for filing a proof of claim, but provided no details about which employee performed the work, the tasks performed or the hours expended, the fee was reduced to $300.

Background

In 2017, the debtors borrowed $137,365 from Movement Mortgage LLC. This loan was memorialized in a promissory note and was secured by a deed of trust on the debtors’ principal residence in Salem and the deed of trust was assigned to Lakeview Loan Servicing LLC.

The debtors filed a bankruptcy petition under Chapter 13 with this court and the court confirmed their plan. The confirmed plan indicates the debtors were behind on their monthly mortgage payments. Lakeview filed a proof of claim showing an arrearage of $11,379.35 on the petition date.

The present controversy began when Lakeview filed a notice that reports a $650fee for “Bankruptcy/Proof of claim fees” and $250 for plan review. The debtors now request this court disallow or reduce post-petition fees, expenses and charges incurred by Lakeview.

Analysis

Lakeview charged a total amount of $900 to the debtors. This included a $250 fee for plan review, $400 for the proof of claim and a $250 bankruptcy fee. The debtors assert that the “fees are unsubstantiated and unreasonably high.” At the hearing, counsel for the debtors specifically asked the court to reduce the proof of claim fee to $300, because $650 was unreasonably high for a task that it contends is largely paralegal work.

Counsel for Lakeview defended the $900 fee as “reasonable” and allowed under the deed of trust. Counsel noted that the “fees charged in this instance are $100 below the allowable amount” under Fannie Mae guidelines.

Examining the caselaw, the court finds the Fannie Mae guidelines have some value, but they are not dispositive. Here, Lakeview’s charges fall within the spectrum of allowable fees under the Fannie Mae guidelines, but the court cannot adjudicate the reasonableness of such fees on the basis of the notice or invoices provided. Those documents include only line items making it difficult for the court to determine the reasonableness of the charges included therein.

Lakeview’s $650 fee for filing the proof of claim is more than double its $250 fee for reviewing the Chapter 13 plan. There is no explanation for these calculations beyond the line-item invoices and Fannie Mae fee schedule. The invoices do not detail which employee performed the work, describe the tasks performed or the hours expended. At the hearing, counsel for Lakeview acknowledged that these are flat fees. Such evidence falls short of the adequate description required to substantiate a secured creditor’s fee.

Overall, Lakeview has not demonstrated that the $650 post-petition fee for filing a proof of claim was reasonable or necessary under the underlying agreement or applicable law and allowable under Fed. R. Bankr. P. 3002.1(e). As such, the fee for filing the proof of claim is hereby reduced from $650 to $300. The $250 fee for plan review is maintained. Therefore, the total fee due to Lakeview under the notice is allowed as $550.

Debtor’s motion granted in part, denied in part.

In re Akers, No. 20-70610, Jan. 16, 2021. WDVA Bankr. at Roanoke (Black). VLW No. 020-4-021. 6 pp.