1 UNITED STATES BANKRUPTCY COURT

2 FOR THE DISTRICT OF OREGON

3
4 Beverlyann Lee Case No.: 16-32793-PCM13
Debtor
5 ____________________________________ ________________________
6 Beverlyann Lee, an Individual Adv. Proc. No. :
0605
7 Plaintiff
v. COMPLAINT
8
9 Nationstar Mortgage, LLC, d/b/a/ Champion 11 U.S.C. § 362 (k)
Mortgage Company
10
Defendant
11
1.
12
13 INTRODUCTION

14
Prior to filing this lawsuit, Plaintiff repeatedly gave defendant notice of her bankruptcy
15 and asked the Defendant to promptly return claim distribution payments errantly
16 released by the US Trustee and paid to the Defendant prior to having an approved
17 claim.

18
2.
19
Moreover, the Defendant did not seek prior Court approval before effectuating
20
voluntary payments for:
21
22 A.) Plaintiff’s then outstanding real property taxes due for 2016 and 2017 taxes on

23 8/2/2018 for $9,900.13 and $10,402.49.

24 B.) Plaintiff’s 2018 taxes of $9,277.51 on 11/8/2018, 6mo. prior to the May 15, 2019
25 “due date” that the Defendant knew was prescribed by this Court.
26
3.
27
Page 1 of 11
28 Beverlyann Lee
3457 NE Couch St. Complaint
Portland, OR 97232
(503) 922 2227
wdiamond@pdx.edu
 1 The Defendant continues to charge the Plaintiff’s HECM loan for attorney fees and

2 costs that have not been disclosed to the Debtor, the US Bankruptcy Trustee, or the
Court using timely filed Official Form 410S2 after being put on notice by the Court
3
that such fees and costs require disclosure within 180 days of the OF410S2 filing date.
4
5 4.
6
Defendant has concealed thousands of dollars of 2018 Corporate Advance payments
7
(inc. inspections fees and attorney Corporate Advance payments and credits) made to
8 (or received from) third party vendors and failed to account for report these
9 transactions in the Plaintiff in monthly account statements. (Ex. # 1, pg. 5: 12/6/18,
10 11/19/18)(Ex.#1, pg. 6, 9/5/18)(Ex. #1, pg. 7, 8/14/18)(Ex. #1, pg.8, 7/26/2018)(Ex.#1,

11 pg. 9, 6/12/18 & 6/5/18)(Ex.#1, pg. 10, 4/20/18)(Ex.#1, pg. 11, 3/8/18)(Ex #1, pg. 12,
2/13/18 & 1/22/18 & 1/11/18)(Ex. #1, pg.14, 1/3/18)
12
13 5.
14
Plaintiff has a right to be free from creditor’s pre-petition debt collection, has a right to
15
stop any creditor from exercising control over Property of the estate, has a right too be
16
free from creditors creating or perfecting a lien on the Property, and has a right to have
17 the Defendant disclose any payment of taxes or legal fees and costs using the requisite
18 Official Form 410S2 within the time limits for disclosure permitted by statute.
19
6.
20
21 Defendant’s willful, repeat violation of the automatic stay results in plaintiff enduring
sleepless nights, chronic upset stomach, and other significant emotional harm distinct
22
from the inherent stress of the normal bankruptcy process, if there can ever be a normal
23
bankruptcy process. The Defendant, even after being told by this Court, continues to
24
circumvent the bankruptcy laws. The Plaintiff has difficulty keeping her hopes up not
25 knowing what the Defendant will do, or not do, next.
26
27
Page 2 of 11
28 Beverlyann Lee
3457 NE Couch St. Complaint
Portland, OR 97232
(503) 922 2227
wdiamond@pdx.edu
 1 JURISDICTION

2
7.
3
This Court has jurisdiction under 28 U.S.C. § 1334 because the automatic stay arises
4
under Title 11.
5
6 8.

7
Plaintiff, Beverlyann Lee, filed Chapter 13 bankruptcy in case number 16-32793-
8 pcm13 in the District of Oregon on July 18, 2016
9
9.
10
11 Defendant Nationstar Mortgage, LLC dba Champion Mortgage Company is a

12 Delaware limited liability company and its Oregon registered agent is Corporation
Service Company, 1127 Broadway Street NE, Ste. #310, Salem, OR 97301.
13
14 10.
15
Venue is proper because Defendant collected debt from Plaintiff while the Plaintiff
16
enjoyed the protection of the US Bankruptcy Court’s automatic stay and the Defendant
17
did collect debt without having an approved claim in the referenced bankruptcy case
18 and has not returned the amounts collected when asked to do so .
19
11.
20
21 NATURE OF CLAIM

22
Pursuant to 28 U.S.C. § 1334(e), the Bankruptcy court has original jurisdiction over the
23 real property at the center of dispute and can hear this action without regard to the
24 amount in controversy. Plaintiff’s automatic stay violation claim is a core proceeding
25 under 28 U.S.C. § 157(b)(2) (see In re Gruntz, 202 F.3d 1074, 1081 (9th Cir. 2000); In

26 re Goodman, 991 F.2d 613, 617 (9th Cir. 1993) and Plaintiff consents to entry of final
orders and judgments by the Oregon Bankruptcy Court in this adversary proceeding.
27
Page 3 of 11
28 Beverlyann Lee
3457 NE Couch St. Complaint
Portland, OR 97232
(503) 922 2227
wdiamond@pdx.edu
 1 12.

2
FACTUAL ALLEGATIONS
3
This complaint’s allegations are based on personal knowledge, Court filings and
4
records, Nationstar custodial account records obtained through an Oregon Division of
5
Financial Regulation complaint #2018-07371(Ex. #1-4) filed by Plaintiff on Dec. 29,
6
2018, and Defendant’s Claim 5-2 filing plus information and belief as to the acts of
7
others.
8
13.
9
10 Defendant received actual notice of the automatic stay in plaintiff’s Chap. 13 case from
11 the bankruptcy-noticing center (def. Attorney filed Request for Notice on 7/29/2016 in

12 the above ref. bankruptcy case) and from plaintiff multiple times, including by mail,
and over the phone.
13
14 14.
15
The bankruptcy notice provided to defendant warned that violating the automatic stay
16
could subject it to penalties.
17
15.
18
19 a.) Trustee Plan Payments
20
After receiving actual notice of the automatic stay, Defendant accepted and retained
21
Chap. 13 trustee payments totaling $6,952.67 without having an approved claim at any
22 time. The US Bankruptcy Trustee wrongly released these plan payments to the
23 Defendant, but the Defendant knew at the time of receipt of each plan payment from
24
1
The information Nationstar provided the Division of Financial Regulation took no more than
25
a week from the date requested to the date submitted. The only reason for Nationstar to
26 provide this information was a threat of regulatory action on its license to conduct business in
Oregon. Sanctions are needed for its willful withholding what should have been provided as
27 an initial disclosure pursuant to Fed. Rule of Civ. Pro. 26(1)(A)(ii).
Page 4 of 11
28 Beverlyann Lee
3457 NE Couch St. Complaint
Portland, OR 97232
(503) 922 2227
wdiamond@pdx.edu
 1 the US Bank. Trustee that its Claim 5-2 had become a contested matter yet to be

2 approved. (Ex. #2, pg. 2, 8/7/17 & 9/8/17), (Ex.#2, pg. 3 7/8/17 & 12/8/16)

3 16.
4
The Defendant has an “affirmative duty” to remedy a violation of the bankruptcy stay,
5
and the Defendant knew the four (4) plan payments received between 12/8/2016 and
6
9/7/2017 totaling $6,952.63 were made by the US Bankruptcy Trustee’s office on its
7
unapproved claim, and thus retaining the trustee payments violates the stay. The Court
8 has an obligation to consider Defendant’s failure to promptly mitigate the damages of a
9 stay violation. See In re Roman, 283 B.R. 1, 12 (B.A.P. 9th Cir. 2002)
10
17.
11
12 At the June 29, 2018 Motion for Relief from Stay hearing, the Defendant willingly, in
open court, renounced further Claim 5-2 distributions, but the Defendant did not offer
13
to return any of the $6,952.63 of errant trustee payments at this hearing, nor did the
14
Defendant return the payments after being asked to do so by Plaintiff in an email dated
15
6/26/2018. (Ex. #5)
16
18.
17
18 b.) Debtor Payment Posting
19
Defendant admitted it effected the post-petition payments for outstanding real property
20
taxes for the tax years 2016-18. (See Doc. 143, Pg.1, ln. 28-9)
21
22
23 19.
24
The Defendant’s accounting for its 2016-2018 real property tax payments accounts for
25
each payment as an HECM loan advance because each increased the Plaintiff’s
26
outstanding HECM principal balance. If it was posted as being a “Corporate Advance”
27
Page 5 of 11
28 Beverlyann Lee
3457 NE Couch St. Complaint
Portland, OR 97232
(503) 922 2227
wdiamond@pdx.edu
 1 or “Lender Advance”, the Plaintiff’s HECM principal Balance would not change, only

2 the Outstanding Corporate Advances section of the monthly statements.

3 20.
4
Apart from permission to pursue judicial foreclosure, the Defendant did not receive
5
further relief from the Court’s 6/29/2018 stay relief Order. The Defendant remains
6
subject to the bankruptcy stay restrictions and protections provided to the Debtor
7
pursuant to 11 U.S.C. § 362(a).
8
21.
9
10 Defendant did not seek or obtain Court approval to make voluntarily, non-escrowed
11 real property taxes payments in full for 2016 and 2017 on 8/2/2018 for $9,900.13 and

12 $10,402.49, respectively, and again for 2018 taxes on 11/8/2018 for $9,277.51. The
Defendant told the Court that the Plaintiff had no available HECM funds to pay
13
outstanding taxes, yet shortly after the Court lifted the stay allowing the Defendant to
14
proceed with a foreclosure, the Defendant paid the same outstanding taxes by charging
15
$29,580.13 to the Plaintiff’s HECM loan balance, as opposed to accounting for the
16
payments as Corporate Advances pursuant to HUD’s published servicing rules found in
17 24 CFR § 206.205 - Property charges.2 This code is made a part of the HECM
18 (Ex.# 6, § 206.205(e)(ii)) The Court should question how the Defendant can charge
19 Plaintiff’s HECM loan balance when the Defendant has told the Court that no available

20 HECM funds were available to pay the same taxes.

21 22.
22
The Court’s 12/4/2017 Order following the hearing for Defendant’s Motion for Relief
23
from Stay acknowledged Plaintiff’s 2016 real property taxes are considered to be “pre-
24
petition” debt for which no provision for repayment exists within the Plaintiff’s
25 confirmed Chap 13 plan. The Defendant’s payment of the 2016 taxes effectively
26
2
27 24 CFR§ 206 is made a part of the HECM Note. (Claim 5-2, pg. 35, 7.(A)(ii)
Page 6 of 11
28 Beverlyann Lee
3457 NE Couch St. Complaint
Portland, OR 97232
(503) 922 2227
wdiamond@pdx.edu
 1 enforced pre-petition debt in violation of the stay. The Court also added to the HECM

2 Deed of Trust the date of May 15th (of the year following the tax year) as the “due date”
for the payment of real property taxes. The Defendant paid the 2018 real property
3
taxes on 11/8/2018, a date that is more than 6mo. prior to the court ordered “due date..”
4
The Defendant’s 2018 tax payment was made without any contractual obligation and
5
should be considered a breach of the agreement,
6
7 23.

8 Despite Defendant themselves having filed a Special Notice Request with the
9 bankruptcy court on 7/28/2016, and after warnings from Plaintiff and an Order from
10 this Court, the Defendant continues to bill Plaintiff’s HECM for post-petition legal fees

11 and other costs prior to submitting the correct Official Form to this Court and/or prior
to receiving this Court’s approval of the Defendant’s charges.
12
13 24.
14 c.) Post Petition Attorney Fees and Costs &
15 Post-Petition Non-escrow Property Charges
16 The Defendant’s 12/10/2018 Response to Debtor’s Motion for Relief From Judgment
17 or Order admits payment of the Plaintiff’s 2016 and 2017 real property taxes stating:
18 “The Debtor’s line of credit under the [HECM] loan was negative (-50,793.54) at the
19 time of payment, such that these tax payments were not paid with proceeds from the

20 credit line as alleged by Debtor.” (See Doc. 143, Pg.1, ln. 28-9)

21 25.
22
The Plaintiff received a Reverse Mortgage Monthly Statement (RMMS) dated 8/1/2018
23
that reports a default balance of $24,463.84 (Ex.#7) and the next month a RMMS dated
24
9/1/2018 reports a default balance of $44,766.46 (Ex. #8) which accounts for the
25 8/3/2018 property tax payments as having been added to the Plaintiff’s HECM
26 Principal Balance because the HECM Principal Balance increased, and no Corporate
27
Page 7 of 11
28 Beverlyann Lee
3457 NE Couch St. Complaint
Portland, OR 97232
(503) 922 2227
wdiamond@pdx.edu
 1 Advances were reportedly made during the statement period. Was the in court

2 statement of the Defendant’s counsel not the truth, or are the statements mailed to the
Plaintiff not accurate?
3
4 26.
5
Either the real property tax payment is a loan advance and charged to the HECM
6
principal loan balance or they are a Corporate Advance because the payment is made
7
using the servicing company’s own funds, as these are the only two legal ways to post
8 the transaction to the Plaintiff’s account ledger.
9
27.
10
11 Accounting for Corporate Advances by adding each, wrongly, to the outstanding

12 HECM principal balance, the Defendant violates the stay because it adds not only the
unreported tax payment to outstanding HECM principal balance, monthly accruals of
13
MIP’s and interest are then billed to the Plaintiff’s HECM loan balance without the
14
Defendant having the contractual right to that income and without done without notice
15
to the Court. Furthermore, because the Defendant paid these real property taxes by
16
adding them to the outstanding HECM line of credit balance, even if done so with
17 complete disregard servicing guidelines, no default event has occurred pursuant to the
18 express terms of the Home Equity Conversion Deed of Trust. (Claim 5-2, pg. 24, ¶ 2)
19
20
21 28.

22 The HECM account notes (Ex # 1, all pages) and account transaction history cannot be
23 reconciled. (Ex. #2, all pages) The account notes (Ex. # 1) contain transaction data for
24 transactions not even included within the HECM account transaction history ( Ex # 2).

25 The HECM account transaction history for 2018 transactions (Ex. #2, pgs. 1-2) does
not even include each of the “attorney fees/costs” line items found in the mailed 2018
26
Annual Transaction Summary (Ex.# 9, pg. 2).
27
Page 8 of 11
28 Beverlyann Lee
3457 NE Couch St. Complaint
Portland, OR 97232
(503) 922 2227
wdiamond@pdx.edu
 1 29.

2
A closer look at the HECM account transaction history the Defendant provided to the
3 to both Oregon’s Division of Financial Regulation and to Fannie Mae show that the
4 Plaintiff provided regulators and Fannie Mae doctored balance details for data columns
5 labeled “Net Line of Credit,” “Principal Limit,” and for the “Net Principal Limit” data.
6
30.
7
Each of these three (3) key loan balances remain the same number for every reported
8
transaction on each of the first three pages of the HECM account transaction history
9
spreadsheets the Defendant provided. (Ex. #2, pgs. 1-4) & (Ex. #4, pgs. 2-5)
10
11 31.

12
An HECM Account Note dated 8/25/2017 also reveals that the Defendant’s current
13 attorney, McCarthy & Holthus, LLP, wrote the Defendant a check in the amount of
14 $13,635.74 on or around 8/16/2017, (Ex #1, pg. 19, 8/17/2017, 8/18/2017, 8/25/2017)
15 but the payment to the Defendant from the Defendant’s own attorney on record is not

16 mentioned in the Master transaction records (Ex, # 2, pg. 3)(Ex. #4, pg. 4) or the
Reverse Mortgage Monthly Statement (Ex. #10, pg. 2) mailed to the Plaintiff.
17
18 32.
19
This Court has already warned the Defendant that they are required to timely file
20
accurate Notices of Post Petition Mortgage Fees, Expenses, and Charges (Form 410S2)
21
billed, and without these notices, the Plaintiff and/or the US Bankruptcy Trustee have
22 no opportunity to contest the billing of the fees and costs being charged against real
23 property held in trust of the estate. The repeated Defendant violation of the stay causes
24 the Plaintiff significant additional stress and fear that the Defendant may never be

25 trusted to follow any Court orders, now or in the future. A great deal of time and
energy has been expended understand, research, and to file this and other complaints.
26
27
Page 9 of 11
28 Beverlyann Lee
3457 NE Couch St. Complaint
Portland, OR 97232
(503) 922 2227
wdiamond@pdx.edu
 1 33.

2
There is reason to believe that attorney fees and costs have been refunded by McCarthy
3 & Holthus only to be billed and paid again at a later date because they original billing
4 date was more than 180 days before the Defendant’s attorney filed its first Official
5 Form 410S2 on March 9, 2017. A large number of attorney fees payment transactions
6 have been refunded only to have the same fees billed again on a later date that falls

7 within the 180 day period prior to Defendant’s filing its 12/11/2017 Official Form
410S2. (original billing: Ex.# 2, pg. 4, 6/6/2017) (refunds: Ex. # 2, pg. 3, 8/18/17-
8
8/25/2017) (new billing: Ex. #2, pg. 3, 9/8/2017)
9
10
11 CAUSE OF ACTION (11 U.S.C. § 362(k))
12
Plaintiff incorporates the allegations above by reference.
13
34.
14
15 Defendant’s violation of 11 U.S.C. § 362(a)(3), (4) and/or (5) as alleged above was
16 “willful” as that term is defined in the Ninth Circuit because its conduct was
17 intentional, it had prior actual knowledge of the automatic stay from multiple sources,

18 its conduct was unreasonable, and any alleged mistake of law was not a defense.
Actions taken to purposely circumvent the US Bankruptcy code’s post-petition
19
payment reporting and reimbursement rules, if proven, must be criminally prosecuted.
20
21 35.

22
Under 11 U.S.C. § 362(k), plaintiff is entitled to compensation for actual damages,
23 proportional punitive damages, and reasonable fees and costs from defendant in
24 amounts to be decided by the Court.
25
36.
26
27 PRAYER FOR RELIEF
Page 10 of 11
28 Beverlyann Lee
3457 NE Couch St. Complaint
Portland, OR 97232
(503) 922 2227
wdiamond@pdx.edu
 1 After a stipulation or determination that Defendant willfully violated the automatic stay

2 for a second time in this case, plaintiff seeks relief as follows:

3 A.) Money Judgment in favor of plaintiff against defendant for actual damages and
4 punitive damages due to the fact that this is a repeat stay violation concerning
5 attorney fee billing issues, and
6
B.) Money Judgment in favor of the Plaintiff for the time and costs incurred
7
prosecuting this adversary proceeding. Plaintiff also seeks any equitable relief
8 this Court may determine is fair, and
9
C.) A ruling from the Court that the payments in violation of the stay are “void.”
10
11 37.

12
Plaintiff may intend to amend this complaint to include additional claims as new
13 information about Defendant’s post-petition attorney fees and real property tax
14 payments should any additional attorney fee or expense billing irregularities or if it is
15 found that tax reimbursement by any note investor/owner has been sought by and paid

16 to the Defendant is learned through discovery.

17
18
RESPECTFULLY FILED,
19
20
21
22 ____________________________ _____________
Beverlyann Lee Date
23
Plaintiff, Pro Se
24
25
26
27
Page 11 of 11
28 Beverlyann Lee
3457 NE Couch St. Complaint
Portland, OR 97232
(503) 922 2227
wdiamond@pdx.edu