The Debtor filed this Chapter 13 case for the primary purpose of curing a sizeable (over six thousand dollars) prepetition arrearage on her home loan with JPMorgan Chase Bank, N.A. She confirmed a plan that amortizes the arrearage over the 60 month term of the plan. It also provides for the Standing Chapter 13 Trusee to act as the conduit for making the ongoing post-petition mortgage payments to Chase. As long as the Debtor timely makes her plan payments, the Trustee should have sufficient funds to pay the ongoing mortgage payment as provided by the Plan.
The Trustee’s records indicate that the Debtor has consistently made her plan payments in the two years that her case has been pending. Nevertheless, a post-petition arrearage in excess of $11,500 had accrued on her mortgage account with Chase as of January 2017. The Debtor had no knowledge of this fact until being served with Chase’s Motion for Relief from the Automatic Stay, which is presently before the Court. She objects to Chase’s Motion, primarily relying on the fact that the Debtor is not in default of her plan obligations.
The Debtor filed her Chapter 13 Petition and Plan on February 25, 2015. Chase objected to the plan on the basis that the ongoing monthly mortgage payment was incorrect. The Debtor amended the Plan to satisfy the objection, Chase withdrew its Objection, and the Plan was confirmed as amended on June 5, 2015. The confirmed Plan requires her to make monthly payments to the Trustee, and directs the Trustee to make three separate payments to Chase: the ongoing monthly mortgage payment of $986.01 for 58 months (the “conduit” payment), an administrative delay payment of $1,972.02 (representing the pre-confirmation payments for March and April 2015), and a prepetition arrearage of$6,325.10, payable at $105.42 for 60 months.
On February 2, 2017, Chase moved for relief from the automatic stay alleging that the Debtor had missed the post-petition mortgage payments for the months of February 2016 through January 2017, resulting in an account delinquency of $11,508.69. Attached to Chase’s Motion are copies of the note, mortgage, a pre-petition loan modification agreement, a payment ledger showing no receipts on the account from February 2016 to January 2017, and a Declaration of one of Chase’s Vice-Presidents, which includes a chart showing the post-petition missed payments as of January 23, 2017.
The Debtor filed an Objection and Memorandum in Opposition to the Motion. She asserts that Chase’s Motion is improper because she is current in making her plan payments to the Trustee.
She attached to her Opposition certain financial records of the Trustee to prove this point. The Debtor also contends that the delinquency on the Chase loan was caused solely by the manner in which the Trustee calculates and makes disbursements in conduit cases, and not due to any fault of her own.
Chase offered into evidence its Motion with attachments and its Proof of Claim by reference. Chase also represented to the Court that while the Motion was pending, the delinquency had been reduced by roughly half as a result of disbursements received from the Trustee. Additionally, Chase conceded that the Debtor was substantially current on all plan payments both at the time the Motion was filed and as of the hearing date. Chase then turned its focus to the Trustee, laying the blame for the accrued delinquency on him. Based solely on the account delinquency, Chase maintains it is entitled to relief from the stay against the Debtor’s home.
Although the Trustee did not file a written response to either Chase’s Motion or the Debtor’s Opposition, his staff attorney appeared at the hearing and confirmed that the Debtor is current on all plan payments. He urged that Chase’s Motion be denied for the reasons set forth by the Debtor. He defended against the assertions that the Trustee’s disbursements were contrary to the terms of the confirmed Plan by arguing that the timing and amounts of disbursements were made pursuant to a longstanding policy of his office that is commensurate with the practices of other trustees administering conduit plans. However, the Trustee did not provide any specifics regarding that policy.