Feds look to give trustees more power
Nashville Business Journal - by Annie Johnson
Date: Tuesday, May 31, 2011, 11:40am CDT
- Annie Johnson
- Reporter
- Email: ajohnson@bizjournals.com
Federal legislation introduced last week is giving credence to a battle being fought in Middle Tennessee by bankruptcy trustee Henry "Hank" Hildebrand.
Hildebrand was the subject of a Friday story related to a growing movement across the country: Judges and debtors who force mortgage companies to produce a physical note before foreclosing on a home.
Because in Tennessee judges aren't involved in the foreclosure process, it's been bankruptcy trustees here who have been fighting that battle instead.
In Middle Tennessee, Hildebrand said he's had about 60 cases this year where a lender couldn't produce the actual note, though he is seeing some movement towards compliance.
The legislation, introduced by Sen. Patrick Leahy, D-Vt., would give the U.S. Trustee Program, the arm of the Justice Department that oversees foreclosures, the power to sanction servicers and lenders who submit false claims, overstate what's owed or don't produce proper documentation.
"The bill would give the Justice Department and the United States bankruptcy trustee important new tools to combat creditor abuses in the bankruptcy process," Leahy said in a statement.
Specifically, the bill would:
- Clarify that the U.S. trustee has a duty to remedy creditor abuse of the bankruptcy process.
- Allow the bankruptcy court, either on its own or in response to a motion from the trustee, to correct or sanction misconduct and fraud committed by creditors in the bankruptcy process.
- Give power to the trustee to establish audit procedures to ensure that creditors are complying with the law.
Read more: Feds look to give trustees more power | Nashville Business Journal
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