How New Bankruptcy Rules Affect The Mortgage Industry

Law360, New York (December 21, 2011, 9:14 PM EST) -- New amendments to the Bankruptcy Rules became effective on Dec. 1, 2011. These amendments add new requirements and potentially harsh penalties for failure to comply. An overview of those amendments follows.

The changes to Rule 3001 of the Federal Rules of Bankruptcy Procedure require notices relating to claims secured by a mortgage on a debtor's principal residence, impose new obligations on mortgage holders, servicers and their attorneys for claims involving borrowers who are individual debtors in current and new bankruptcy cases. Mortgage holders and mortgage servicers...
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