Attorneys Find Loopholes in Bankruptcy Law

More than 10 months after a new bankruptcy law took effect, debtors' attorneys are finding new ways to create headaches for mortgage servicers, according to creditors' lawyers who spoke at the Western States Loan Servicing Conference in Las Vegas.Michael Ackerman, an attorney with Zucker, Goldberg & Ackerman in New Jersey, said that debtors' lawyers are urging debtors in bankruptcy court to sue servicers for "proof of claim" issues involving fees such as broker price opinions and inspections that are routinely required during default servicing. Because the law is new, he said servicers should consider litigation in order to have a greater say in the development of case law involving the bankruptcy statute. Being a plaintiff gives lenders more control over the facts of the case coming to court and what bankruptcy judge decides it, he noted. "Whoever hits the issue first in each district will have an overwhelming influence on the cases that come after," Mr. Ackerman said.