U.S. Trustee Program Probing Law Firms, Mortgage Handlers In Bankruptcy Cases

The U.S. Trustee Program is scrutinizing law firms and a large U.S. mortgage processor to ensure they properly handle foreclosure proceedings, Dow Jones Daily Bankruptcy Review reported today. In recent months, the U.S. Trustee Program has intervened in two cases, in Mississippi and Louisiana. Bankruptcy trustees are examining whether law firms and Lender Processing Services Inc., a Jacksonville, Fla., mortgage technology and information provider, bungled foreclosures and hurt borrowers, according to court documents. The law firms and Lender Processing deny wrongdoing. A trustee in the Louisiana case installed a two-year program to monitor how a law firm handles bankruptcy proceedings, according to a document filed in bankruptcy court last week. Pursuing mortgage servicers for improper filings is an important new "prong" of the trustee program's efforts to oversee the flood of bankruptcy cases following the mortgage crisis, Clifford White III, director of the program, said in an August speech. "We aim to hold mortgage servicers to the same standard of completeness and accuracy in their filings that we do the debtors who owe them money," White said.