Debtor’s pre-petition escrow obligations under the mortgage documents were claims for purposes of the Bankruptcy Code’s automatic stay

The servicer in Campbell v. Countrywide Home Loans, Inc. 07-20499, — F.3d —-, (5th Cir. (Tex.), August 26, 2008 ) took the position that a debtor’s pre-petition escrow obligations under the mortgage documents were not claims for purposes of the Bankruptcy Code’s automatic stay. It therefore reasoned that it could increase the amount of the pre-petition escrow payments without having the stay lifted. It relied on RESPA’s rules allowing a servicer to recalculate monthly escrow payments to ensure that there would be a sufficient balance in the debtor’s escrow account to satisfy the escrow expenses as they became due. The servicer posited that a claim for the unpaid escrow payments would only accrue when it paid an escrow expense, and there were insufficient funds in the escrow account to cover the expenses. The Fifth District affirmed the Bankruptcy court which held that the pre-petition escrow payments are claims for purposes of the automatic stay. The stay does not determine a creditor’s claim but merely suspends an action to collect the claim outside the procedural mechanisms of the Bankruptcy Code. Therefore, staying efforts to collect pre-petition escrow amounts does not bar a servicer from asserting its contractual rights in the bankruptcy court. However, the Circuit court reversed the finding that the servicer violated the stay by including these amounts in its Proof of Claim. The court found no precedents in which a court has held that asserting a right to payment in a Proof of Claim constitutes a violation of the automatic stay. In fact, a number of courts * * * have found that an automatic stay has no effect on actions that are expressly allowed under the Bankruptcy Code.

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