The Bankruptcy Court for the District of Vermont sanctioned PHH Mortgage Company $375,000.00 for overcharging three separate debtors (Gravel, Beaulieu and Kinsley) a total of $76.00. Pursuant to Bankruptcy Rule 3002.1, additional fees and expenses of mortgage companies must be disclosed to debtors and the Chapter 13 trustee must have the opportunity to object. In addition, at the end of the case a Debtor may seek confirmation that they are current with their post-petition mortgage payments. In all three cases, PHH Mortgage violated one or both provisions. There was evidence that PHH Mortgage had violated the rule in the past. The Trustee and PHH Mortgage left it to the court to determine the proper amount of the sanction. The Court used the following three-prong test:
The Court wanted to insure PHH Mortgage corrected its ways and thought $375,000.00 would get its attention. The Debtors (Gravel, Beaulieu and Kinsley) did not receive the $125,000.00 each but, instead, the money was paid to a local charity providing legal assistance to indigent consumer debtors.