1 1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF MISSISSIPPI 2 JACKSON DIVISION 3 IN RE: MICHAEL & ALBERTA STAMPS 4 NO. 03-06305-NPO 5 6 ******* 7 BEFORE THE HONORABLE NEIL P. OLACK UNITED STATES BANKRUPTCY COURT JUDGE 8 9 Monday, July 16th, 2007 Jackson, Mississippi 10 10:00 a.m. 11 ********** 12 APPEARANCES: 13 GREGORY JOHN FARIES, ESQ. Attorney at law 14 REPRESENTING MICHAEL AND ALBERTA STAMPS 15 JEFFREY ALEXANDER, ESQ. Attorney at law 16 REPRESENTING LITTON LOAN SERVICING 17 TRACY DARBY, ESQ. Attorney at Law 18 REPRESENTING JAMES L. HENLEY, JR. CHAPTER 13 TRUSTEE 19 20 ************************************************* 21 DEBRA WILLIAMS, CSR Certified Shorthand Reporter 22 Notary Public 23 MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES Post Office Box 433 24 Mt. Olive, Mississippi 39119 601.797.9240 25 1.800.73STENO MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 2 1 TABLE OF CONTENTS PAGE 2 Style Page.................................... 1 3 Table of Contents............................. 2 4 Opening Statements 5 By Mr. Faries............................ 3 By Mr. Alexander......................... 5 6 EXAMINATION OF WITNESSES: 7 MICHAEL STAMPS Direct By Mr. Faries..................... 12 8 Cross By Mr. Alexander................... 28 9 DAPHNE MOSLEY Direct By Mr. Alexander.................. 30 10 Cross By Mr. Faries...................... 38 Redirect By Mr. Alexander................ 52 11 12 Certificate of Reporter...................... 60 13 14 E X H I B I T S 15 Exhibit No. 1, Debtor Tracking Statement ..... 12 16 Exhibit No. 2, Documents...................... 12 17 Exhibit No. 3, Copies of Checks............... 12 18 Exhibit No. 4, Proof of Claim................. 12 19 Exhibit No. 5, Payoff Statement............... 12 20 Exhibit No. 6, Payoff Statement............... 12 21 Exhibit No. 7, Final Payoff Statement......... 12 22 Exhibit No. 8, Deduction Report............... 12 23 Exhibit No. 9, Final Report and Account....... 12 24 Exhibit No. 10, Proof of Insurance............ 49 25 MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 3 1 THE COURT: The last matter I have on 2 the docket is in the Stamps case. We have 3 the Debtors' Motion for an Order Declaring 4 the Claims of Americredit and Litton Loan 5 Servicing Current and Defaults Cured, and a 6 response filed by Litton Loan. 7 MR. BARKLEY: Your Honor, if it please 8 the Court, I have no other matter before the 9 Court. May I be excused? 10 THE COURT: You may. Anyone else has 11 anything? Now, since I understand this may 12 take a while, I'd like for counsel on both 13 sides just to give me a summary on what they 14 expect the proof to show today, and I'll 15 give you an opportunity to make your record. 16 Mr. Faries. 17 MR. FARIES: Your Honor, we filed this 18 motion to determine that the debt is current 19 based on what we feel will be payment 20 records that we'll produce based upon the 21 payment records of both the trustee and 22 private payment records of Mr. and Mrs. 23 Stamps. In addition, we would maintain 24 that some of the arrearages might have bled 25 over into the new account somehow, so we are MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 4 1 concerned about that. And we intend to 2 maybe put into evidence the payment records, 3 the proofs of claim, the various payoff 4 statements, some salary records, and 5 various other documents we feel would prove 6 where we are today. 7 THE COURT: Okay. Thank you. 8 MR. ALEXANDER: Your Honor, in 9 disputing that, Jeff Alexander here for 10 Litton Loan Servicing. I have Ms. Daphne 11 Mosley from Litton Loan, and I expect her to 12 testify as to her review of the debtors' own 13 bank statements as provided by counsel to 14 the debtor, and as well as her review of the 15 debtor tracking of payments and the trustee 16 tracking of payments to Litton Loan 17 Servicing. And I expect the evidence to 18 show that the debtor would be in arrears at 19 least six months, which would still place 20 the debtor in arrears approximately $6,300. 21 THE COURT: Has everybody seen the 22 other side's documents? 23 MR. ALEXANDER: We have. 24 MR. FARIES: I believe we tried to 25 trade out as far as applicants. MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 5 1 THE COURT: In order to speed things up 2 this morning, which will soon be this 3 afternoon, is there a way we could admit the 4 documents by stipulation? 5 MR. ALEXANDER: Yes, sir. 6 MR. FARIES: Yes, sir. And as well, 7 Your Honor, I've marked as a Court's exhibit 8 for you to review as I go over it with the 9 witness, if you'd like. 10 THE COURT: Let's do this. On behalf 11 of the trustee, have you seen everything 12 that we're going to talk about this morning? 13 MS. DARBY: Your Honor, I have not seen 14 everything, and I'm a little bit confused as 15 far as the motion to declare mortgage is 16 current. I know that Ameriquest Mortgage 17 Company, the ongoing was to be paid direct 18 per plan, and that the arrears was $6,134.90 19 is what the proof of claim was filed for for 20 the arrears and at 9 percent interest. We 21 have paid that amount in addition to the 22 939.07 in interest. 23 We received a letter from Ameriquest 24 back in April '06 stating that the loan had 25 been sold to Litton Loan. And then on June MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 6 1 6th of this year we received a letter from 2 Litton Loan stating that "This letter is to 3 advise you the above referenced loan was 4 released from the bankruptcy department for 5 the following reason: Loan paid in full." 6 So I'm -- 7 MR. FARIES: The loan has been 8 refinanced and some of the charges had been 9 paid. And we're still faced with arrearages 10 and will try to do some accounting, Your 11 Honor. 12 MR. ALEXANDER: And, Your Honor, that's 13 why I'm here. I initially asked if the loan 14 has been paid in full, why are we here? I 15 believe that the debtor is saying that 16 Litton Loan Servicing, for some reason or 17 another, has obligated them to pay 6,000 18 more than they should have in paying off the 19 loan. 20 THE COURT: So this is to get money 21 back from the payoff, is that correct, 22 Mr. Faries? 23 MR. FARIES: That is correct. When we 24 originally filed this, I believe the loan 25 was still pending. And then my client had MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 7 1 the opportunity to remove himself from the 2 Litton portfolio and did so. And that's why 3 we think that we need to have some 4 accounting done to see if these charges were 5 appropriate. 6 MS. DARBY: Your Honor, the other issue 7 I have with that is, I don't recall ever 8 receiving a motion to refinance during the 9 pendency of the bankruptcy. 10 MR. FARIES: This was after bankruptcy. 11 MS. DARBY: My other issue is, do we 12 need to be here for this? Since this was 13 filed, the bankruptcy is still in place. 14 I'm not sure, but I don't think the bank has 15 ever been dismissed, so... 16 MR. FARIES: It's been discharged. 17 MS. DARBY: Okay. So the bankruptcy, 18 it was closed on February '07, and then it 19 was reopened on March 29th of '07. So this 20 loan is between that time? 21 MR. FARIES: It's after. The loan took 22 place after discharge. The refinance took 23 place after discharge, if I remember 24 correctly. 25 MR. ALEXANDER: Well, the case was MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 8 1 discharged pursuant to Judge Ellington. We 2 sent some payments for February of '07, and 3 it was refinanced in June. 4 THE COURT: In June, okay. 5 MR. FARIES: Okay. So you're correct. 6 THE COURT: We had a Chapter 13. 7 Trustee believes that all the payments that 8 were required to be paid out were, in fact, 9 paid out. 10 MS. DARBY: The arrearage payments. 11 That's correct. 12 THE COURT: Okay. And the other 13 payment was direct to the mortgage. The 14 regular payments? 15 MS. DARBY: That's correct. 16 THE COURT: All right. So now we're of 17 the focus here. All right. So now the case 18 is dismissed. 19 MR. FARIES: It's discharged. 20 THE COURT: It's discharged and closed. 21 You filed, Mr. Faries, a motion to reopen 22 the Chapter 13 because you were concerned 23 that the amounts that were previously paid, 24 the arrearage amounts, were in access of the 25 amount. MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 9 1 MR. FARIES: What happened, when my 2 client gathered the information for the 3 purpose of the refinance, he discovered 4 there was a $6,000 charge plus some other 5 charges on the payoff statement that he 6 thought had been taken care of in 7 bankruptcy. And then when we discovered 8 that, we filed a motion to reopen to 9 straighten it out. 10 THE COURT: Okay. So you then filed 11 this motion saying that the amount was 12 cured -- 13 MR. FARIES: In the bankruptcy. 14 THE COURT: -- in the bankruptcy. And 15 the amount that is paid were in excess of 16 the cured amount. 17 MR. FARIES: That is correct. 18 THE COURT: And Litton responded. All 19 right. Now -- 20 MR. ALEXANDER: And Litton responded 21 and we can show it. 22 THE COURT: Okay. All right. We're 23 getting there. So now we have a whole bunch 24 of documents. And what I'd like to do is 25 take a recess so that you can go ahead and MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 10 1 to the extent that you can, stipulate to 2 those being admitted into evidence. Because 3 we don't need to take the time in going 4 through all the formalities admitting each 5 document separately. So our court reporter 6 will give you stickers, and let's go ahead 7 and premark all these exhibits and put them 8 into evidence. And then that will take us, 9 that will be 15 minutes well spent and will 10 shorten this hearing considerably. 11 It doesn't sound like this is a battle 12 of the documents. It's an interpretation of 13 those documents, I think. Is that a fair 14 statement? 15 MR. ALEXANDER: Yes, sir. 16 MR. FARIES: That's right, Your Honor. 17 THE COURT: Okay. So let's go ahead 18 and recess and see if we can get that done. 19 And how long do you think you guys need to 20 work it out? 21 MR. FARIES: Your Honor, I think we can 22 do it in maybe two minutes. We've already 23 done this outside, so... 24 THE COURT: Okay. I'll give you ten. 25 MR. FARIES: Okay. MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 11 1 THE COURT: We'll recess for ten 2 minutes. 3 (RECESS WAS TAKEN) 4 (EXHIBIT NOS. 1 THROUGH 9 WERE PREMARKED FOR THE 5 RECORD.) 6 THE COURT: You may be seated. 7 MR. ALEXANDER: Your Honor, my 8 representative, she had to step out to the 9 restroom. 10 THE COURT: Okay. Have we been able to 11 premark all the exhibits? 12 MR. FARIES: Yes, Your Honor. 13 THE COURT: And they have been admitted 14 into evidence? 15 MR. FARIES: Yes, Your Honor. 16 THE COURT: Let me take a look at them 17 real quick. 18 MR. FARIES: Yes, sir. Your Honor, I 19 also marked as just Court's Exhibit A, so 20 that even though they might have that 21 particular exhibit, you can have it to 22 follow. 23 THE COURT: Okay. And that's one of 24 the exhibits that is going to be introduced? 25 MR. FARIES: Yes, sir. It's No. 2. MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 12 1 THE COURT: Okay. The exhibits, it 2 looks like we have Exhibits 1 through 9 that 3 are being submitted by counsel as joint 4 stipulation that these nine exhibits will be 5 admitted and received into evidence in this 6 case; is that correct? 7 MR. ALEXANDER: That's right, Your 8 Honor. 9 THE COURT: Okay. Mr. Faries, your 10 motion? 11 MR. FARIES: Yes, sir. 12 THE COURT: You may proceed. 13 MR. FARIES: We call Michael Stamps. 14 THE COURT: Mr. Stamps, you can come 15 forward, please. 16 THE WITNESS: Yes, sir. 17 THE COURT: And Ms. Harkins will swear 18 you in. 19 MICHAEL STAMPS 20 having been first duly sworn, 21 was examined and testified as follows: 22 THE COURT: You may be seated. 23 Mr. Faries, you may proceed. 24 MR. FARIES: Thank you, Your Honor. 25 DIRECT EXAMINATION MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 13 1 BY MR. FARIES: 2 Q Will you state your name for the 3 record, please, Mr. Stamps? 4 A My name is Michael Stamps. 5 Q And are you the creditor -- excuse me, 6 the debtor in this particular Chapter 13 7 bankruptcy case? 8 A Yes, sir, I am. 9 Q Okay. Why did you file bankruptcy? 10 A Because my wife was sick and she could 11 no longer work, and so we stood the chance of 12 losing our home. And we wanted to prevent that 13 from happening. 14 Q Okay. Now, when approximately did you 15 file bankruptcy? 16 A In October of 2003. 17 Q And approximately how far behind were 18 you on your house payments at that time? 19 A Approximately, when all the fees were 20 added, I think around $6,000. 21 Q I'm going to hand you what's been 22 premarked as Exhibit 4. Do you recognize that 23 document? 24 A Yes, sir, I do. 25 Q And what is this document? MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 14 1 A This is a proof of claim that was filed 2 with the bankruptcy court. 3 Q And who filed that proof of claim? 4 A Well, you did for us. 5 Q Okay. I will direct you to this corner 6 of the document. 7 A Okay. 8 Q And who submitted that proof of claim? 9 A Ameriquest Mortgage Company. 10 Q Okay. And in this proof of claim they 11 indicate how much debt is owed on this particular 12 property. 13 A So it's secured at $110,270.59. 14 Q Okay. And under the Secure Claim 15 portion of this particular document, how much 16 does it show the arrearage to be? 17 A $6,134.90. 18 Q Okay. Now, I'm going to direct you to 19 Addendum A, which is the next page. And what 20 does that show? 21 A Well, this shows that six payments at 22 $838.82 each was equal to $5,032.92. Six late 23 charges at $50.33 each, which totaled $301.98. 24 Foreclosure fees and cost appraisals, $425 for 25 the foreclosure fee and $375 for the appraisal, MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 15 1 and total arrears $6,134.90. 2 Q Okay. As far as the appraisal is 3 concerned, were you aware of anybody ever 4 appraising your property? 5 A No, sir, I was not. 6 Q Okay. No one's ever come on your 7 property and looked at it, that you know of? 8 A No, sir. 9 Q Okay. In this particular -- again, 10 we're referring to Addendum A, are there any 11 charges for attorneys' fees there? 12 A I don't see any. 13 Q Okay. Any charges for bankruptcy fees 14 or anything like that there? 15 A No, sir. 16 Q Okay. Now, subsequent to your plan 17 being confirmed, what happened as far as the plan 18 payment was concerned? 19 A Well, once the plan was confirmed, 20 payments were deducted from my payroll account at 21 UMC. 22 Q Okay. And what developed where you 23 felt you had to change that? 24 A Well, because my wife's condition 25 worsen, and so we needed to continue to get her MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 16 1 medication. And since I was getting paid 2 monthly, and with her Social Security disability 3 also coming in monthly, we felt that it would 4 work out best for us if we had everything -- we 5 paid the house directly, since it was getting 6 paid at the end of the month anyway. 7 Q Okay. And when did you amend the plan? 8 A I think we requested the amendment 9 around January of 2005. 10 Q And when was the final order entered -- 11 amended? 12 A To the best of my knowledge, around 13 February of 2005. 14 Q And was the wage order changed to 15 reflect that modification of the plan? 16 A Yes, sir, it was. 17 Q All right. I'm going to hand you what 18 has been premarked as Exhibit 8. Do you 19 recognize that document? 20 A Yes, sir, I do. 21 Q And what is that document? 22 A This is the deduction report from the 23 University of Mississippi Medical Center Payroll 24 Division. 25 Q Okay. And when did the change in wage MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 17 1 order take effect? 2 A It took effect March 18th, 2005. 3 Q Okay. And that's when the wage order 4 actually went down? 5 A Yes, sir. 6 Q Okay. Now, when did you start making 7 payments directly to AMC at the time? 8 A To the best of my knowledge, I think we 9 began in April of 2005. 10 Q I'm going to hand to you what's been 11 premarked as Exhibit 3. Do you recognize those 12 documents? 13 A Yes, sir, I do. 14 Q Okay. What does those documents show? 15 A This shows payments that were made to 16 AMC Mortgage and Litton Loan Service by me. 17 Q Okay. And on the front page that is 18 something that we've generated to sort of 19 summarize the following documentation. And to 20 the best of your knowledge, does that summary 21 correctly reflect the actual copies of the 22 documents that were attached to that schedule? 23 A Yes, sir, it does. 24 Q Okay. All right. And this document 25 shows that between May 5th of '05 and May 1st of MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 18 1 '07 you paid how much to either AMC or Litton? 2 A $21,962.32. 3 Q Okay. And that's just what you've been 4 able to glean from you records? 5 A Yes, sir. That's correct. 6 Q Okay. When did Litton Loan Servicing 7 take over your loan? 8 A May of 2006. 9 Q And how did you find out? 10 A They wrote us a letter. 11 Q Okay. And what did that letter 12 basically say? 13 A It basically told us that AMC Mortgage 14 Service was no longer servicing our loans, that 15 they would be the new loan servicer, and start 16 making payments directly to them. 17 Q And did you do so? 18 A Yes, sir, I did. 19 Q And did that reflect in that exhibit 20 that I just handed you that you had started 21 making payments at that time? Exhibit 3? 22 A Yes, sir, it reflects it. 23 Q Okay. Did you continue making 24 Chapter 13 payments during this time period? 25 A Yes, sir, I did. MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 19 1 Q Were you current on your Chapter 13 2 payments? 3 A Yes, sir. 4 Q Have you received any correspondence 5 from Litton or AMC that you were in arrears under 6 any payments to them? 7 A No, sir, I have never. 8 Q All right. When you received a 9 discharge, do you remember when that was? 10 A Yes, sir. It was February of 2007. 11 Q Okay. And at that time you were 12 seeking to refinance your house? 13 A Yes, sir. 14 Q And what did you do in preparation for 15 refinancing your house? 16 A Well, the first thing I did was request 17 a payoff statement from Litton. 18 Q Okay. I'm going to hand you what's 19 been premarked as Exhibit 5. Do you recognize 20 that document? 21 A Yes, sir, I do. 22 Q And what is that document? 23 A It's just the payoff statement from 24 Litton Loan Servicing. 25 Q Okay. And what does it show is in MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 20 1 arrears on that document? 2 A Well, I'll start with the interest. 3 It's showing $6,287.21 in interest and escrow 4 amounts of $2,892.66. Total late charges 5 $1,655.40. Corporate advance of $1,963.50. 6 Q Does that document agree with your 7 records? 8 A No, sir, it does not. 9 Q And more particularly that document 10 Exhibit 3. It's already entered into evidence. 11 All right. Now, I'm going to refer you to page 2 12 of this document. What does that entitle? 13 A This is the corporate advance 14 detail/breakdown. 15 Q All right. It shows an inspection fee 16 on there. How much is that inspection fee? 17 A $325. 18 Q And when was the date of the 19 transaction on that? 20 A May 11th, 2006. 21 Q Were you in bankruptcy at that time? 22 A Yes, sir, I was. 23 Q All right. It shows a BPO fee of 24 $98.50. When was the date of that transaction? 25 A May 11th, 2006. MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 21 1 Q Another BPO fee in the amount of $105. 2 When was the date of that transaction? 3 A June 26th, 2006. 4 Q And an appraisal fee of 375. When was 5 the date of that transaction? 6 A May 11th, 2006. 7 Q Bankruptcy cost of 110 -- oh, excuse 8 me, foreclosure cost of 425. When was the date 9 of that entry? 10 A May 11th, 2006. 11 Q Bankruptcy attorney fee of 525. When 12 was the date of that entry? 13 A May 11th, 2006. 14 Q Of all these charges, have there ever 15 been a motion or amended proof of claim to show 16 these charges were being incurred? 17 A No, sir. I've never seen one. 18 Q And on all these dates that we just 19 read off, were you in bankruptcy? 20 A Yes, sir, I was. 21 Q Okay. I will now hand you a document 22 that's been premarked as Exhibit 6. Do you 23 recognize that document? 24 A Yes, sir, I do. 25 Q And what is that document? MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 22 1 A And this is also a payoff statement 2 from Litton Loan Servicing. 3 Q Again, what do they allege is in 4 arrears? 5 A Starting with the interest, it's 6 $6,478.23. Escrow balance of $4,081.94. Late 7 charges $1,844.85. And a corporate advance of 8 $2,063.50. 9 Q Okay. I'm going to, again, direct you 10 to the second page. We have an inspection fee of 11 325. When was the date of that entry? 12 A May 11th, 2006. 13 Q A BPO of 98.50. When was the date of 14 that entry? 15 A May 11th, 2006. 16 Q BPO fee of 105. When was the date of 17 that entry? 18 A June 26th, 2006. 19 Q All right. And we have a BPO fee of 20 $100. When was the date of that entry? 21 A 3/21/2007. 22 Q All right. You got your discharge in 23 February of '07; is that correct? 24 A That is correct. 25 Q Okay. An appraisal fee of 375. When MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 23 1 was the date of that entry? 2 A May 11th, 2006. 3 Q Another foreclosure cost of 425. When 4 was the date of that entry? 5 A May 11th of 2006. 6 Q Bankruptcy cost of 110. When was the 7 date of that entry? 8 A May 11th, 2006. 9 Q And a bankruptcy attorney fee of 525. 10 When was the date of that entry? 11 A May 11th, 2006. 12 Q Again, were you aware of any motion or 13 any kind of amended proof of claim indicating 14 these charges being put into your account? 15 A No, sir. 16 Q All right. You're finally able to get 17 this particular matter refinanced; is that 18 correct? 19 A That is correct. 20 Q And when were you able to consummate 21 refinance to actually do a closing? 22 A Actually, around the 1st of June of 23 this year. No exact date. 24 Q I'm going to hand you a document that's 25 been premarked as Exhibit 7. Do you recognize MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 24 1 that document? 2 A Yes, sir, I do. 3 Q What is that document? 4 A This is a final payoff statement from 5 Litton Loan Servicing. 6 Q Okay. Now, let's go through what they 7 allege you owe. Again, what is the interest due 8 that's alleged there? 9 A The interest is $6,180.97. 10 Q Principal balance? 11 A $101,519.04. 12 Q Okay. Late charges? 13 A $316.87. 14 Q Escrow? 15 A $4,081.94. 16 Q Attorney's ref fee? 17 A $1,435. 18 Q BPO fee collected? 19 A $303.50. 20 Q Okay. Now, the total due was how much? 21 A The total balance due was $115,690.30. 22 Q Okay. And, in fact, four pages back it 23 shows that there's a check issued to Litton Loan 24 Servicing in the amount of 115,725.55. Now, was 25 that tendered to Litton in full complete MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 25 1 settlement of your claim -- of your mortgage? 2 A Yes, sir, it was. 3 Q And did that, to the best of your 4 knowledge, include these fees that's hidden in 5 the previous payoffs? 6 A Yes, sir. 7 Q Okay. Now, I noticed that the late 8 fees are split up on this document. Do you 9 recognize one says 316.87 and the other one says 10 1,527.98? 11 A Yes, sir, I see that. 12 Q That 316.87 is pretty close to the 13 figure that was on the original proof of claim; 14 isn't it? 15 A That's correct. 16 Q I also note on these particular payoff 17 statements that the inspection fee of 325 -- 18 excuse me, the appraisal fee of 375 is very 19 similar to the amount that was complete. The 20 original proof of claim, is it not? 21 A Yes, sir, that's correct. 22 Q All right. As far as the foreclosure 23 cost, I also note the $425 is the same figure 24 that was on the two payoff statements and the 25 proof of claim, was it not? MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 26 1 A Yes, sir. 2 Q Okay. To the best of your knowledge, 3 has Litton or AMC filed any kind of amended proof 4 of claim or mortgage -- I mean, motion, excuse 5 me, indicating getting approval for the payment 6 of these fees or incurring these fees on your 7 behalf? 8 A No, sir. 9 Q Okay. 10 MR. ALEXANDER: Your Honor, I would 11 object and move to strike, in regard to that 12 fact that the bankruptcy was already 13 discharged when this closing took place. 14 So, therefore, the fees will have no 15 relevance whatsoever to the facts that's 16 based in this case. 17 MR. FARIES: In response, Your Honor, I 18 think that if these fees were incurred 19 during the course of the bankruptcy and was 20 collected afterwards, it would probably be a 21 violation of discharge injunction at 22 minimal. 23 THE COURT: I'm going to deny your 24 motion to strike. I believe the question 25 was, were you aware of any motion being MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 27 1 filed? That's not testifying about whether 2 the fees are required or not. So I'm going 3 to deny your motion. 4 MR. ALEXANDER: Yes, sir. 5 BY MR. FARIES: 6 Q Now, you had hazard insurance on this 7 house at all times; is that correct? 8 A That is correct. 9 Q And you've had your real estate taxes 10 paid directly. You paid them directly? 11 A Yes, sir. 12 Q Okay. Have you ever received a 13 statement, other than when you requested from 14 Litton, as to whether you're in arrears on any 15 payments or any type of insurance coverage or 16 taxes? 17 A No, sir, I have not. 18 Q Okay. Were you aware of Litton or AMC 19 ever filing a motion to lift stay on this 20 particular property during the course of your 21 bankruptcy? 22 A No, sir. 23 Q Have AMC or Litton ever threaten to 24 foreclose on your property after the bankruptcy? 25 A No, sir. MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 28 1 Q Has Litton or AMC ever sent an 2 appraisal to your house? 3 A No, sir. 4 Q Okay. Have they inspected your house? 5 A No, sir. 6 Q Do you know what a BPO fee is? 7 A I have no idea, sir. 8 Q Okay. But they charged your account 9 three times for it? 10 A That's correct. 11 Q Okay. So your testimony, then, is that 12 you paid approximately $21,000 during the course 13 of the bankruptcy to either AMC or Litton? 14 A That is, sir. 15 Q And that you're aware of the trustee 16 paying them close to $12,000 to AMC or Litton? 17 A That's correct. 18 Q Okay. And for your direct payment? 19 A Yes, sir. 20 Q And the arrearage the trustee paid was 21 about a little over $6,000? 22 A Yes, sir. 23 Q And that arrearage that the trustee 24 paid was that which was on the original proof of 25 claim, was it not? MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 29 1 A Yes, it was. 2 MR. FARIES: That's all I have, Your 3 Honor. 4 THE COURT: Cross-examination? 5 MR. ALEXANDER: Yes, sir. 6 CROSS-EXAMINATION 7 BY MR. ALEXANDER: 8 Q Mr. Stamps, I'm Jeff Alexander here for 9 Litton Loan Servicing. 10 A Please to meet you. 11 Q You filed your motion to pay through 12 the trustee back in January of '05; is that 13 right? 14 A Yes, sir. 15 Q Okay. And to the best of your 16 recollection, that motion was granted in February 17 of '05, right? 18 A That's correct, sir. 19 Q Okay. You didn't make a payment to 20 Litton directly until April of '05, didn't you? 21 A I wasn't paying Litton until May of 22 2006. 23 Q Excuse me. That motion was granted 24 February of '06. Now, you didn't make a payment 25 to Litton until April of '06, didn't you? MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 30 1 A Yes, sir. According to the records, 2 Litton Loan Service took over the account May of 3 2006. At that point that's when I started paying 4 Litton. When we had filed a motion to pay 5 direct, it was in January of 2005. And so... 6 Q Your motion was filed and granted in 7 February of '05, right? 8 A Yes, sir. 9 Q Okay. You didn't make another payment 10 directly to anybody on this loan until May 29th 11 of '05, didn't you? 12 A No, sir. That doesn't sound correct 13 there. We constantly made our payments. 14 Q Okay. 15 MR. ALEXANDER: I've got no further 16 questions, Your Honor. 17 THE COURT: Mr. Faries? 18 MR. FARIES: We have none. 19 THE COURT: You may step down. 20 THE WITNESS: Thanks. 21 THE COURT: All right. Mr. Faries, 22 your next witness. 23 MR. FARIES: That'll be all, Your 24 Honor. 25 THE COURT: Okay. Mr. Alexander? MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 31 1 MR. ALEXANDER: Your Honor, I'd like to 2 introduce you to Ms. Daphne Mosley with 3 Litton Loan Servicing. 4 THE COURT: Will you come forward and 5 stand in the witness box, and Ms. Harkins 6 will swear you in. 7 DAPHNE MOSLEY 8 having been first duly sworn, 9 was examined and testified as follows: 10 THE COURT: You may be seated. Do you 11 have a copy of something? 12 MR. ALEXANDER: Exhibits 1 and 2, Your 13 Honor. 14 DIRECT EXAMINATION 15 BY MR. ALEXANDER: 16 Q Ms. Mosley, state your full name for 17 the record? 18 A Daphne Mosley. 19 Q And, ma'am, how are you associated with 20 Litton Loan Servicing? 21 A I work within the legal department. 22 Q Okay. And are you familiar with the 23 account made the basis of this matter in the 24 Stamps account? 25 A Yes, I am. MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 32 1 Q Okay. Have you had an occasion to 2 review Exhibit 1, which are the bank statements 3 of Mr. Stamps? 4 A Yes, I have. 5 MR. ALEXANDER: Your Honor, may I 6 approach the witness? 7 THE COURT: You may. 8 BY MR. ALEXANDER: 9 Q Ms. Mosley, after having an occasion to 10 review those records, what, if any, conclusions 11 have you raised with regard to those? 12 A That these payments were, in fact, 13 received by Litton and posted to the Stamps' 14 account. 15 Q Okay. And how, if any way, did you 16 reach that conclusion? 17 A By reviewing our internal payment 18 records and also by retrieving documents from our 19 third party in which electronic payments are 20 processed. 21 Q Okay. 22 MR. ALEXANDER: Your Honor, may I 23 approach the witness? 24 THE COURT: You may. 25 BY MR. ALEXANDER: MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 33 1 Q I'll show you what's marked and has 2 identified as Exhibit No. 2 and ask you if you 3 can identify that document. 4 A Yes. This is a bankruptcy payment 5 ledger prepared by Litton Loan Servicing. 6 Q Okay. And under that, what else is 7 that comprised of? 8 A This is comprised of all of the 9 payments received and posted by the Chapter 13 10 trustee and by the Stamps. 11 Q Okay. When was this mortgage entered? 12 A January 23rd, 2003. 13 Q Okay. You don't dispute the fact that 14 the pre-partition arrearage of $6,134 and some 15 odd cents was made and then paid by the trustee, 16 do you? 17 A No, I don't. 18 Q How much, if any, money did the trustee 19 pay on the pre-partition arrears of this case? 20 A $7,076.05. 21 Q Okay. When this bankruptcy was filed, 22 were the Stamps paid through the trustee? 23 A Yes. Initially we were receiving 24 ongoing and arrearage payments from the trustee. 25 Q Okay. After reviewing the MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 34 1 documentation, do you have any knowledge at all 2 as to whether the fact that Mr. Stamps asked to 3 be allowed to pay direct? 4 A Yes. A motion to amend the plan to pay 5 payments direct was filed on January 4th, 2005. 6 Q Okay. Have you had an occasion to 7 review the documents and find out when and if at 8 any time the motion was granted? 9 A February 18th, 2005. 10 Q Okay. According to your review of the 11 records, when did the trustee disburse those 12 funds to Litton? 13 THE COURT: I'm sorry. You said "those 14 funds." Which funds are you talking about? 15 BY MR. ALEXANDER: 16 Q The funds held in escrow for the 17 mortgage payments, when were they disbursed to 18 you? 19 A For the ongoing payments, those were 20 disbursed from June 2004 through February 15th, 21 2005. 22 Q Okay. Did the trustee have an occasion 23 to give you money to turn over money that it had 24 been holding to make payments? 25 A I'm not clear on what you're asking. MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 35 1 Q Yes, ma'am. The trustee, did it pay 2 over to the loan servicing company some money 3 after the judge granted the motion to allow 4 Mr. Stamps to pay direct? 5 A No. Not after that motion was entered, 6 no. 7 Q Okay. Did the trustee ever have an 8 occasion to pay over some $11,891? 9 A Yes. That's the total amount of funds 10 received for the regular monthly mortgage 11 payments. 12 Q Okay. And those were disbursed when? 13 A June 2004 through February 15th, 2005. 14 Q Okay. What did that $11,891 15 disbursement amount apply to as far as mortgage 16 payments? 17 A That paid through December 1, 2004 18 post-petition payment. 19 Q Okay. When did Mr. Stamps first make a 20 post-petition payment? 21 A On April the 29th, 2005. 22 Q Did he make a payment directly to you 23 in January of '05? 24 A No, he did not make a payment in 25 January '05. His first payment was April 2005. MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 36 1 Q Okay. And in April of '05 what month 2 was that payment applied to? 3 A That was applied to the January 2005 4 payment. Because at the time when he resumed 5 making his payments direct, he was down two 6 payments. 7 Q Okay. 8 THE COURT: Let me make sure I'm 9 understanding this correctly. You were 10 receiving the regular monthly payment 11 directly from the trustee? 12 THE WITNESS: Right. 13 THE COURT: And then an order was 14 entered in February of 2005 authorizing the 15 debtor to make the regular monthly payment 16 direct; is that correct? 17 THE WITNESS: Yes. 18 THE COURT: And the last regular 19 monthly payment that you received from the 20 Chapter 13 trustee was credited for which 21 month? 22 THE WITNESS: December 1, 2004. So -- 23 THE COURT: So then your testimony is, 24 you received a payment in April of 2005 from 25 the debtor which you attributed as a regular MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 37 1 monthly payment; is that correct? 2 THE WITNESS: Yes. 3 THE COURT: And you applied that April 4 receipt to the January 2005 regular monthly 5 payment? 6 THE WITNESS: Yes. 7 THE COURT: Okay. I just want to make 8 sure I have the numbers right. Thank you. 9 MR. ALEXANDER: Yes, sir. 10 BY MR. ALEXANDER: 11 Q Ms. Mosley, how many payments -- to 12 make it easy, how many payments did Mr. Stamps 13 make in 2005? 14 A May I look at it? 15 Q Yes, ma'am. 16 MR. ALEXANDER: May I approach? 17 THE COURT: You may. 18 THE WITNESS: We received a total of 19 nine payments directly from Mr. Stamps for 20 2005. 21 BY MR. ALEXANDER: 22 Q Ms. Mosley, how many payments was 23 Mr. Stamps short in 2005, for lack of a better 24 term? 25 A He was short three payments. And that MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 38 1 would come up to two payments that were in 2 default at the time that he began making his 3 payments directly, because the trustee had not 4 sent enough funds to satisfy it, and then he 5 himself did not tender a payment. 6 Q Okay. Ma'am, I'm going to ask you to 7 look at your itemization and tell us how many 8 payments Mr. Stamps made in 2006, please. 9 THE COURT: You said "your 10 itemization." Are you talking about 11 Exhibit 2? 12 MR. ALEXANDER: Exhibit 2. 13 THE COURT: Thank you. 14 MR. ALEXANDER: Yes, sir. 15 THE WITNESS: There were ten payments 16 received by Mr. Stamps in 2006. 17 BY MR. ALEXANDER: 18 Q Okay. Ma'am, for lack of a better 19 term, how many payments was he short in 2006? 20 A Two. 21 THE COURT: Again, we're talking about 22 regular monthly payments? 23 MR. ALEXANDER: Exhibit 2. Yes, sir. 24 BY MR. ALEXANDER: 25 Q Would you now please take some time, MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 39 1 ma'am, and review Exhibit 2, and tell us how many 2 payments you made in 2007 until they refinanced. 3 A He made four payments in 2007. 4 Q Okay. Ma'am, how many payments was he 5 short in 2007? 6 A As of what date? 7 Q As of the date of refinance. I'm 8 sorry. 9 A Two. 10 Q Between 2005 and 2007. Then he was 11 short seven payments; is that right? 12 A That's correct. 13 Q Okay. How much money was Mr. Stamps in 14 arrears to you when he refinanced? 15 A In payments, a little over $6,000. 16 Q Okay. 17 MR. ALEXANDER: I pass the witness, 18 Your Honor. 19 THE COURT: Mr. Faries, 20 cross-examination? 21 CROSS-EXAMINATION 22 BY MR. FARIES: 23 Q Now, Ms. Mosley, as far as the payments 24 are concerned, I notice there are a lot of 25 charges in here for suspense account. What is MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 40 1 that? 2 A That is not a charge. That would be 3 his payment. That's basically a holding account 4 until the proper disposition of his payment can 5 be determined. 6 Q So if you receive money but you weren't 7 sure where it went, you put it in a suspense 8 account? 9 A Right. That's what AMC did, yes. 10 Q Okay. Would that have a tendency to 11 skew the numbers a little bit, if you have money 12 that you're not applying? 13 A Like, how do you mean? 14 Q Appearing that the account is further 15 in arrears than it actually is. 16 A Yes, it could. 17 Q Okay. 18 THE COURT: Let me ask a quick question 19 about that. If you received a payment on 20 January 15th and put it in suspense, but 21 didn't figure out until March 15th where it 22 was applied, do you back out the interest? 23 THE WITNESS: Well, this is not a daily 24 simple interest loan, so additional interest 25 don't accrue. It's just that the interest MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 41 1 that's on the loan is not paid down because 2 it's an adjustable rate loan. But it's a 3 regular amortizing loan. So if the payments 4 are not applied, then the balance is just 5 not paid down. It's not like additional 6 interest is added, if that makes sense. 7 THE COURT: Does the interest accrue 8 that would be less had it been applied 9 timely? 10 THE WITNESS: Well, the interest is 11 accrued based on the payments. And once 12 payment is applied, that interest is 13 satisfied. So he's not going to be paying 14 additional interest. It's just going to, 15 you know, it's just going to accrue based on 16 the number of the delinquent payments. So 17 even though there could be a delay in 18 posting a payment, he would not pay more 19 interest than he would have if it was 20 applied as soon as it was received. 21 THE COURT: Thank you. 22 BY MR. FARIES: 23 Q When you, for lack of a better term, 24 park a payment in the suspense account, does that 25 also cause the late fees to be triggered? MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 42 1 A Yes, a late charge will be triggered if 2 a loan is contractural delinquent. 3 Q Okay. And if they tender funds that 4 were put into this account and then you applied 5 them later, would the late fees be backed out 6 also? 7 A At Litton it would, yes. 8 Q But at AMC, you couldn't testify for 9 AMC? 10 A That's correct. 11 Q Okay. Are you familiar with the 12 various payoff statements that are issued by 13 Litton? 14 A I have not seen them personally. 15 Q All right. Let me hand you what has 16 been premarked as Exhibit 5 then. And do these 17 numbers report with what you have prepared for 18 the court today, given the time frame? We're 19 talking about the February 20th time frame versus 20 today. 21 A I'm sorry, I don't understand your 22 question. 23 Q All right. This particular statement 24 dated February 20th indicates interest accrue of 25 $6,287.21. All right. Where on this schedule MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 43 1 that you provided to the court today would that 2 number be? 3 A Where? I'm not sure if I understand 4 your question. I'm sorry. 5 Q Well, maybe I'm comparing apples and 6 oranges, and I apologize if I am. Would this 7 Exhibit 1 properly -- would reflect that the 8 arrearages were in February of '07? This 9 document that you've prepared today? 10 A It will show what the contract due date 11 was at the time. 12 Q But it wouldn't show the arrearages? 13 A Not the complete arrearages. 14 Q Okay. On page 2 of that document I 15 just handed you all these fees that are incurred. 16 Is that reflected on this document that you've 17 prepared for the court today? 18 A No. The document that was prepared for 19 this court only identifies payment receipt and 20 application. 21 Q So as far as these fees that are 22 charged to this account on this document I've 23 handed you, you're not aware of either Litton or 24 its predecessors filing any motions to approve 25 these fees or any amended proof of claim to MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 44 1 approve these fees, are you? 2 A No, I'm not. 3 Q Okay. I'm going to hand you what has 4 been premarked as document -- 5 A Six. 6 Q Same basic question. Your schedule 7 that you prepared for the court today is not 8 going to really be able to be reflected on this 9 payoff statement, is it? 10 A No. 11 Q And, again, on these various fees that 12 are -- what is a BPO fee? 13 A Broker Price Opinion. 14 Q Okay. And what does it do? 15 A It tells us the current evaluation of 16 the property. 17 Q Do you retain somebody locally or 18 what's the deal there? 19 A Yes. 20 Q This account, when doing this account, 21 who did y'all hire locally to prepare this? 22 A I did not research to see who the was 23 the actual agent that came out. 24 Q All these fees appear to have been 25 filed against the account in either May or June MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 45 1 of '06; is that correct? 2 A Correct. 3 Q And that's during the time period that 4 Mr. and Mrs. Stamps were in bankruptcy; is that 5 correct? 6 A Correct. 7 Q Okay. Now, I noticed on both of these 8 documents we have an inspection fee of 325, an 9 appraisal fee of 375, foreclosure cost of 425, 10 bankruptcy cost of 110, and bankruptcy attorney 11 fee of 525. And all these appear to be in the 12 month of May and June of '06. Were these 13 actually accrued in '06 or were they accrued 14 during the time AMC had possession of this 15 account? 16 A It's kind of hard to tell by looking at 17 this. The inspection and BPOs more than likely 18 those could be -- some of those could be an 19 accumulation. But the -- 20 Q Excuse me. Accumulation meaning AMC 21 had already acquired the expenses? 22 A Right. It could have -- 23 THE COURT: Let's back up. 24 MR. FARIES: I apologize. 25 THE COURT: You said "an accumulation." MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 46 1 What do you mean by that? 2 THE WITNESS: I mean it could be, like, 3 more than one inspection could have been 4 completed. So the inspection fee for 325, I 5 have never seen one inspection fee for 325. 6 They're normally substantially less than 7 that, which leads me to believe that this 8 amount of 325 represents multiple inspection 9 fees. 10 THE COURT: But from this document and 11 your personal knowledge, you have no idea 12 when those were incurred? 13 THE WITNESS: No, I do not. 14 THE COURT: Okay. Do you have any 15 personal knowledge of any of these fees? 16 THE WITNESS: I don't. 17 THE COURT: You don't know when they 18 were incurred, and you don't have any idea 19 why they were incurred? 20 THE WITNESS: Well, for the inspection 21 BPOs, I would know why they would be 22 incurred. But for the foreclosure and the 23 bankruptcy fees and costs, I would not know 24 why. 25 BY MR. FARIES: MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 47 1 Q So when it says "transaction date" over 2 in this left-hand column, what does that mean? 3 Does that just mean when accounting actually did 4 it? 5 A Right. That would generally mean when 6 the bill actually hit our system. Not 7 necessarily when the service was completed. 8 Q Okay. So given that then, all of these 9 fees were incurred prior to the dates that are on 10 this statement then? 11 A Yes, more than likely. 12 Q And that's on both of these? Both the 13 one dated on February 20th and the one dated on 14 May 30th? 15 A Right. That would be correct. 16 Q I'll hand you what's been premarked as 17 Exhibit 7. Are you familiar with that type of 18 document? 19 A Yes. It's a payoff statement generated 20 by Litton Loan Servicing. 21 Q Okay. Now, it appears that we've 22 changed nomenclature here. The interest due, 23 comparing this to the May 30th of 2007, the 24 payoff statement appears to have changed from 25 $6,478.23 to $6,180.97. What would cause that? MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 48 1 A It's driven pure by the delinquencies. 2 So on this particular payoff statement the 3 interest due is from 12/1/06. So in your 4 statement that you currently have, you have to 5 look to see what month. 6 Q Okay. So we're talking about the 7 payoff statement Exhibit 6 says it was good 8 through June 13th of 2007, and the final 9 statement was dated June 21, 2007. There'd be 10 that much change in a matter of a week? 11 A No. Look down at the interest due. 12 Q Okay. 13 A And it says "from." And it'll have a 14 contractural date there. And on this statement 15 it says 12/1/06. 16 Q So it's strictly for that roughly 17 six-month period that you're talking about? From 18 June -- excuse me, a year and a half period of 19 time? 20 A Right. At the time that this loan was 21 paid off, the loan was contracturally due for 22 1/1/07. However, interest is paid a month in 23 arrears. So actually the interest is calculated 24 from 12/1/06. 25 Q All right. The next item was late MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 49 1 charges of $316.87. Now, again, referring to the 2 other document you prepared today, would that be 3 reflected on this document? These late charges? 4 A No, it would not. 5 Q Okay. So you really don't know when 6 these late charges were applied or where they're 7 from? 8 A No. You would have to look at the 9 detail payment issue to see when each late charge 10 was accessed. 11 Q Okay. Well, now, there's a detailed 12 transaction history attached to this, so let's 13 find out where that 316 came from. It appears 14 you have some charges back in July of '06 in late 15 fees all the way back through May '06. During 16 this time period is when you know the Stamps were 17 in bankruptcy; is that correct? 18 A Yes. 19 Q Okay. And did y'all hand your proof of 20 claim or file a motion on any of these charges, 21 that you're aware of? 22 A No, not to my knowledge. 23 Q What's the escrow fee on this 24 $4,081.94? What does that entail? Would that be 25 what? MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 50 1 A In looking at this payment history, it 2 looks like it was for lenders' post insurance. 3 Q What is that? 4 A Hazard insurance. If the lender does 5 not have proof of hazard insurance, after 6 notifications are sent to the borrower and we 7 still did not receive proof of insurance, then we 8 will purchase a policy and notify the borrower 9 that one has been purchased. 10 Q Is there any indication on this 11 document that notice, in fact, has been sent out? 12 A No, not on this particular document. 13 Q Okay. 14 MR. FARIES: Your Honor, by agreement, 15 this is going to be Exhibit 10. 16 (EXHIBIT NO. 10 WAS MARKED FOR THE RECORD. ) 17 BY MR. FARIES: 18 Q So that escrow charge will be a 19 lender's single-interest insurance? 20 A Some of it will. It looks like the 21 bulk of this came over from AMC. 22 Q All right. 23 A But I do show that Litton did force at 24 least one policy. 25 Q Okay. Now, I've handed to you Exhibit MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 51 1 10, which has been stipulated and agreed to, 2 which indicates insurance coverage on this house 3 with State Farm. Would that document have 4 indicated, again, whether a notice had been sent 5 out to the lender -- I mean the borrower, excuse 6 me, again? 7 A Yes. I'm sorry, as far as -- 8 Q Would they have any kind of indication 9 that a notice had been sent to the borrower that 10 insurance need to be put in force? 11 A Yes. 12 Q Okay. Now, I've handed you Exhibit 10, 13 which is a proof of insurance form showing that 14 there was some coverage on that house during this 15 time period. What would happen if Litton 16 discovered there was insurance on a piece of 17 property after they had forced placed insurance? 18 A Then we would cancel our policy and 19 provide a complete refund to the -- credit the 20 escrow account for a complete refund if there was 21 an elapse. If they were allowed to coverage, 22 then, of course, that would still be charged to 23 their account. But the rest will be refunded. 24 Q And this was done during the time that 25 the Stamps were in bankruptcy? This charge for MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 52 1 the lender's interest insurance? 2 A If that was on March 22nd, 2007. 3 Q Exactly after the bankruptcy was 4 completed? 5 A Correct. 6 Q Okay. All right. The next item is 7 attorney's rent fee $1,435. What does that 8 represent? 9 A I'm not sure exactly. I've never seen 10 it termed exactly that way. The only fee that it 11 could be would be associated with a bankruptcy or 12 foreclosure action. 13 Q Okay. Now, as far as you can tell from 14 your records, prior to me filing this motion in 15 this matter, had Litton retain local counsel or 16 retain counsel to review this file? 17 A No, not to my knowledge. 18 Q Okay. Had it been in foreclosure and 19 was it being prepared for foreclosure during the 20 interim? 21 A That's possible. 22 Q It's possible that you can't testify 23 one way or the other? 24 A No, I don't have knowledge one way or 25 the other. MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 53 1 Q So we really can't explain this 2 attorney referral fee then, can we? 3 A No, not based on the articles in front 4 of me. No, I can't. 5 Q And your personal knowledge of the file 6 wouldn't enlighten us either, would it? 7 A No. The only thing I could give you is 8 my professional opinion of what that fee 9 represents. 10 Q Okay. But you can't testify as to the 11 specifics of this file, though? 12 A In regards to that fee, no. 13 Q Okay. 14 MR. FARIES: I beg the court's 15 indulgence. That's all I have, Your Honor. 16 THE COURT: Redirect? 17 REDIRECT EXAMINATION 18 BY MR. ALEXANDER: 19 Q Ms. Mosley, you've already heard 20 testimony from the debtor himself that he was 21 discharged from bankruptcy on February the 2nd of 22 '07. My question to you is, when were these 23 escrow fees for hazard insurance charged by 24 Litton? 25 A In March 2007. MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 54 1 Q Some one month and 20 days after he was 2 discharged from bankruptcy, right? 3 A Correct. 4 Q Thank you. 5 MR. ALEXANDER: No further questions, 6 Your Honor. 7 THE COURT: Does anybody have anything 8 further? Any other witnesses? 9 MR. ALEXANDER: No, sir. 10 THE COURT: Ma'am, you can step down. 11 Mr. Faries, anything further? 12 MR. FARIES: Nothing further, Your 13 Honor. We rest, Your Honor. 14 THE COURT: All right. Why don't we go 15 into chambers briefly with just counsel and 16 make sure I understand exactly what it is 17 that you're trying to ask me to do here, and 18 then we'll come back on the record. 19 Ms. Russell, will you just bring them 20 into chambers to my conference room, please. 21 We'll be in recess. 22 (RECESSED.) 23 THE COURT: All right. I had counsel 24 in my chambers to go over some of the issues 25 that were outstanding for this Michael and MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 55 1 Alberta Stamps matter. As far as the 2 court's preparation and opinions on the 3 case, where do we stand? 4 MR. FARIES: We have negotiated, and we 5 are in the impasse with a little bit of 6 assistance from the Court, we might not need 7 an impasse. 8 THE COURT: How would we get that? 9 MR. ALEXANDER: Well, Judge, I will 10 just put really the case in your hands from 11 this point. After talking to my client, we 12 -- actually counsel and I would like to talk 13 to you in chambers off the record. 14 THE COURT: Okay. We have another 15 matter that I'm going to go ahead and 16 dispose of, because it will be rather quick. 17 MR. ALEXANDER: Okay. 18 THE COURT: And then we'll get back to 19 that matter. 20 (A BREAK WAS TAKEN.) 21 THE COURT: I think we have now cleared 22 out the document. 23 MR. FARIES: Yes, sir. 24 THE COURT: You have me until 5:00, so 25 let's see if we can get this thing resolved. MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 56 1 I had suggested that the parties discuss 2 settlement because of certain issues in the 3 brief. And if you're not able to resolve 4 it, I'm more than happy to issue an opinion. 5 But tell me where you are as far as the end 6 for settlement. 7 MR. FARIES: I have authority to a 8 certain level, and we're a fair piece apart. 9 I think that the authority that I've been 10 given is appropriate, given the information 11 that's available to me. 12 THE COURT: Okay. 13 MR. ALEXANDER: Your Honor, I have 14 authority on the inspection of the BPO and a 15 delay in backing that out in getting that. 16 THE COURT: Well, let's not put the 17 settlement on the record. 18 MR. ALEXANDER: Okay. 19 THE COURT: But if you want to discuss 20 in chambers, I'll be happy to do that. Does 21 everybody have time to see if I can meet 22 with counsel? Is that okay with everybody 23 else here? Okay, everybody has indicated 24 that's fine. Let's go into chambers and let 25 me hear where we are. We'll be adjourned MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 57 1 for at least 15 minutes. 2 (A BREAK WAS TAKEN.) 3 THE COURT: The motion for an order 4 declaring 32-22-D5 claim of Americredit and 5 Litton Loan Servicing Current and Defaults 6 Cured, there was a response to that motion 7 filed by Litton Loan. But since the 8 response, it says Litton requests a hearing 9 and doesn't outline any specific response to 10 the allegations made by the debtor. 11 The debtor had burden of proof, with 12 respect to its motion, and challenged a 13 number of the charges that were contained in 14 the exhibits that were introduced into 15 evidence by agreement. And, specifically, 16 I'm referring to the final payoff statement, 17 Exhibit 7, as the last position taken by 18 Litton Loan, as far as how much was owed. 19 There seems to have been a dispute as to 20 whether the debtor, during the course of the 21 case, was delinquent on certain payments. 22 And Litton responded to that and indicated 23 that their records showed approximately 24 seven months or seven payments, I think was 25 the term was used was short, and we never MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 58 1 understood what that meant. 2 However, the witness provided to the 3 court today from Litton unfortunately was 4 not able to speak to specific charges from 5 her personal knowledge. The witness could 6 not identify specifically the amounts 7 contained in the escrow advance, and when 8 they were posted, why they were posted. If 9 they were for insurance, whether notice of 10 failure to provide insurance was actually 11 sent to the debtor. So, essentially, while 12 the representative from Litton could 13 speculate or provide opinion as to why that 14 amount was there, there was no personal 15 knowledge. The debtor contested. And 16 unfortunately for Litton, Litton was not 17 able to refute the allegations that the 18 amount was improper. 19 With respect to the other three charges 20 on Exhibit 7, attorney/r-e-f fee $1,435, 21 inspection fee $325, BPO fee collected 22 303.50. Those three amounts, again, the 23 witness wasn't able to testify as to a 24 personal knowledge as to why those amounts 25 were charged to this account. Again, she MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 59 1 was able to offer opinions as to why they 2 were there, but not actual knowledge of why 3 they were charged and when they were 4 charged. So, again, the debtor had the 5 burden on that escrow advance, and the 6 attorney fee, inspection fee, and BPO fee. 7 The debtor met that burden, and Litton was 8 not able to provide evidence as to why those 9 amounts were properly charged. 10 So I'm going to award the debtor an 11 amount equal to those four items that are 12 set forth in the payoff statement. And 13 counsel will prepare an order reflecting 14 that as the amount that needs to be returned 15 to the debtor. And then it may very well be 16 that there's a justification for those 17 amounts. However, without a witness here in 18 court today to tell us specifically of that 19 witness' personal knowledge as to why they 20 were charged, I'm unable to say that Litton 21 met its burden of refuting those charges. 22 So that's the amount of the award. 23 And, gentlemen, if you'll prepare an order 24 to that effect, and we'll get it signed. 25 And the debtor should be refunded that money MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 60 1 within ten days of the order. Any 2 questions? If not, this court is adjourned. 3 (ADJOURNED) 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 MELISSA L. MAGEE PROFESSIONAL REPORTING SERVICES 1.800.73STENO 61 1 CERTIFICATE OF COURT REPORTER 2 I, Debra A. Williams, CSR, and Notary 3 Public in and for the County of Hinds, State of 4 Mississippi, hereby certify that the foregoing 5 pages, and including this page, contain a true 6 and correct transcript of the testimony of the 7 witness, as taken by me at the time and place 8 heretofore stated, and later reduced to 9 typewritten form by computer-aided transcription 10 under my supervision and to the best of my skill 11 and ability. 12 I further certify that I placed the 13 witness under oath to truthfully answer the 14 questions in this matter under the power vested 15 in me by the State of Mississippi 16 I further certify that I am not in the 17 employ of or related to any counsel or party in 18 this matter, and have no interest, monetary or 19 otherwise, in the final outcome of the 20 proceedings. 21 Witness my signature and seal this the 22 _____ day of ________________________, 2007. 23 _____________________________________ 24 DEBRA A. WILLIAMS, CSR My Commission Expires May 12, 2010 25