ORDER DETERMINING DEBTOR'S OBJECTION TO CLAIM NO. 3

C. TIMOTHY CORCORAN, III, United States Bankruptcy Judge.

This case came on for final evidentiary hearing on June 1, 2001, of the debtor's objections to Claim No. 3 of Wilshire Credit Corporation ("Wilshire" or "bank") (Document Nos. 65 and 82). Following a full day's evidentiary hearing, the court requested post-hearing memoranda. Wilshire filed a brief (Document No. 102) on August 1, 2001, and a supplemental brief (Document No. 115) on September 12, 2001. The debtor filed his response to Wilshire's brief (Document No. 105) on August 21, 2001.

This is a confirmed Chapter 13 case. Wilshire holds the second mortgage on the debtor's homestead. The debtor objects to the allowance of Wilshire's claim on several theories and seeks additional damages for the bank's alleged violations of the Real Estate Procedures Settlement Act ("RESPA").

At the hearing, neither the debtor nor Wilshire put on witnesses in support of their positions. Instead, the debtor placed into evidence his exhibits as to his communications with Wilshire. Wilshire relied upon the documents attached to its proof of claim. After considering the exhibits admitted at trial as well as the pleadings and written arguments of the parties, including the authorities cited by the parties, the court determines that the debtor's objection to Wilshire's claim should be largely sustained. The court further determines that the debtor has established that Wilshire has violated the provisions of RESPA but has proved no damages.

I. BACKGROUND

The debtor borrowed $33,500 from Metropolitan Mortgage Company ("Metropolitan") on August 8, 1997, and in return gave to the bank a second mortgage on his homestead. In 1998, Washington Mutual Bank ("Washington Mutual"), the bank holding the purchase money first mortgage on the debtor's homestead, initiated a foreclosure action in state court, Case No. 98-6757CI-SEC 11. Washington Mutual joined Metropolitan as a defendant in that action. Metropolitan then filed a cross-claim against the debtor seeking to foreclose its second mortgage on the debtor's homestead.

Metropolitan obtained a summary judgment of foreclosure on March 17, 1999. The judgment fixed the liability of the debtor to Metropolitan as of February 23, 1999, in the amount of $36,196.68, representing a principal balance of $31,940.51, accrued interest of $1,686.98, and attorney's fees and costs of $2,569. The summary judgment also scheduled a foreclosure sale of the debtor's homestead on April 28, 1999, but the state court later cancelled the sale on the debtor's motion.

The foreclosure action proceeded in a contested posture as between Washington Mutual and the debtor for some months until the state court ultimately entered judgment in favor of Washington Mutual on August 8, 1999. The judgment scheduled a foreclosure sale of the debtor's homestead for September 10, 1999.

On September 2, 1999, the debtor filed a petition under Chapter 13 of the Bankruptcy Code to reorganize his debts and to stay the foreclosure sale. In his Chapter 13 plan (Document No. 2), the debtor proposed to pay the arrearage claim of Washington Mutual without interest over 36 months or the life of the plan. The debtor made no provision in his plan to pay an arrearage claim to Metropolitan (now Wilshire). The debtor instead proposed that Metropolitan (now Wilshire) retain its lien and receive its regular payments outside the plan. The court set January 3, 2000, as the last date to file proofs of claim.

On April 17, 2000, — well after the bar date — Metropolitan filed a proof of secured claim (Claim No. 3) in the amount of $41,994.79 that it claimed was as of April 13, 2000. The proof of claim included specific claims for monies owed on the foreclosure judgment in the amount of $36,196.68, a charge for publication of notice of sale in the amount of $68.18, and $800 in post-judgment attorney's fees. These components of the claim do not, however, add up to the total amount claimed. Metropolitan did not claim a prepetition arrearage.

On May 23, 1999, the debtor sent a letter to Metropolitan (Debtor's Exhibit No. 49) requesting information about the specifics of Metropolitan's proof of secured claim. There is no evidence before the court as to Metropolitan's response to the May 23, 1999, letter, if any.

The court confirmed the debtor's plan (Document No. 27) on June 13, 2000, without objection. The order confirming plan did not provide for the payment of any prepetition arrearages to Metropolitan (now Wilshire). Instead, the confirmation order provided that Metropolitan would be paid outside the plan. The court entered an order allowing and disallowing claims and ordering disbursements (Document No. 37) on August 31, 2000.

The debtor immediately commenced filing a series of motions seeking to put into issue his objections to the claims of Metropolitan and other creditors (Document Nos. 39A, 44, and 48). All of these motions were denied without prejudice by the court for procedural reasons.

In the meantime, Metropolitan sent a notice to the debtor that his loan was being transferred to Wilshire Credit Corporation ("Wilshire") effective October 1, 2000 (Debtor's Exhibit No. 48). This notice was followed by a transfer of servicing notice (Debtor's Exhibit No. 51) that assigned a new loan number and showed a balance of $33,030.63 owing on the loan at the time of transfer.

The debtor immediately sent a letter, dated October 26, 2000, that demanded an explanation for the discrepancy between the amount owing on the loan as reflected on the transfer of servicing notice and the amount owing as reflected in Proof of Claim No. 3. The debtor further stated that his records reflected 37 payments had been made on the loan making the principal balance less than either the transfer of servicing notice or the proof of claim.

Wilshire responded to the debtor by letter dated December 13, 2000 (Debtor's Exhibit No. 55). Wilshire offered no explanation for the discrepancy between its loan accounting and the proof of claim, writing that it "did not receive a breakdown of the claim" from Metropolitan. Wilshire wrote that at the time of transfer, October 1, 2000, the principal balance on the loan was $28,673.80 with a complete balance of $33,030.63. Wilshire also provided to the debtor a statement showing the breakdown of amounts due. Finally, Wilshire reminded the debtor that the state court summary judgment of foreclosure assessed to the debtor attorney's fees and costs. Wilshire's response to the debtor contained the name and telephone number of the person who had written the letter. Wilshire did not affirmatively respond to the debtor's assertion that Metropolitan had failed to credit some of his payments. It is unclear on the evidence before the court whether Wilshire investigated this specific complaint.

Upon receipt of this letter, the debtor sent a second letter, dated January 19, 2001 (Debtor's Exhibit No. 56), that included the debtor's new loan number. In the letter, the debtor asserted that the breakdown of loan payments provided by Wilshire in its December 13, 2000, letter did not reflect credit for payments he made for September and October of 1997 and for October 1999 through November 2000. The debtor also objected to a charge for unpaid interest that appeared on the breakdown because there was no deficiency on the loan and all payments were current. The debtor further objected to the attorney's fees and costs assessed in the foreclosure judgment because that foreclosure judgment was "effectively vacated" by the state court. Finally, the debtor again requested a breakdown of the balance owing on the proof of claim and informed Wilshire that he had filed an objection to that claim.

During this same time period, Wilshire and the debtor also communicated with respect to flood insurance on the debtor's homestead. Sometime in November of 2000, Wilshire sent a letter to the debtor asking for proof of flood insurance and stating its intention to force place such insurance if the debtor did not comply. The debtor responded by letter (Debtor's Exhibit No. 53) objecting to force placed flood insurance and stating that the bank holding the first mortgage had waived its requirement for flood insurance more than three years earlier. On December 7, 2000, Wilshire sent the debtor a notice of its intention to procure force placed flood insurance (Debtor's Exhibit No. 54) due to his failure to show proof of insurance. The notice provided a 15-day period in which the debtor could avoid the force placed insurance by showing proof of insurance. There is no evidence before the court as to whether Wilshire did force place flood insurance on the debtor's homestead.

Wilshire filed a transfer of claim on January 24, 2001. The clerk gave a notice of transfer (Document No. 61) on February 8, 2001, that established a 20-day time period within which objections to the transfer of claim could be made. The debtor timely objected to the transfer of claim (Document No. 67) reiterating his complaints about Wilshire's imposition of force placed flood insurance and its failure to properly credit his account. The debtor also filed an objection to Wilshire's claim (Document No. 65) on February 13, 2001.

The court conducted a preliminary hearing on April 4, 2001, of the debtor's objection to the transfer of claim and objection to Wilshire's claim. The court overruled the debtor's objection to transfer (Document No. 79) and directed the clerk to transfer Claim No. 3 to Wilshire. The court scheduled the objection to Wilshire's claim for final evidentiary hearing on June 1, 2001. The court stated that, "[f]or procedural purposes, I want the claimants to come to the hearing to present evidence of the amount and validity of their claims. . . . You have heard on many occasions what Mr. Tomasevic's complaints are and I want those complaints to be addressed." (Document No. 91, transcript of hearing held on April 4, 2001, at 13, lines 23-26, and at 14, lines 1-4).

The debtor filed a second objection to Wilshire's claim (Document No. 82) on May 16, 2001. The May 16, 2001, objection incorporates the issues raised in the debtor's earlier objection to claim (Document No. 65) and raises additional issues.

II. ISSUES

The debtor first argues that Wilshire has made an arithmetic error in totaling the three components of the claim (Document No. 65 ¶ 6). The debtor asserts that the total amount of the claim as presented adds up to only $37,064.86.

Second, the debtor asserts that Wilshire failed to substantiate its post-judgment charges consisting of the publication of sale and post-judgment attorney's fees (Document No. 65 ¶ 8).

Third, the debtor concedes that the total amount of the foreclosure judgment is correct but argues that the judgment was "effectively vacated" as a consequence of an order entered by the state court canceling the foreclosure sale (Document No. 65 ¶ 7). The debtor therefore objects to the imposition of attorney's fees and costs.

Fourth, the debtor argues that the proof of claim is overstated because it fails to credit prepetition payments he has made (Document No. 65 ¶ 9).

Finally, the debtor asserts set off claims for damages under RESPA for Wilshire's imposition of force placed flood insurance (Document No. 85 ¶ 5) and its failure to perform its obligations under that act triggered by the debtor's transmittal of what he alleges were "qualified written requests." (Document No. 82 ¶¶ 3 and 4).

Wilshire concedes the debtor's first two arguments and states its willingness to amend its claim to include the total judgment amount of $36,196.68, plus interest from February 23, 1999, through the date of filing in the amount of $1,905.57, for a total secured claim in the amount of $38,102.25. Wilshire asserts that this then establishes the debtor's total prepetition indebtedness to Wilshire.

As to the debtor's remaining objections, Wilshire argues that the debtor failed to establish cause to object to Wilshire's claim and therefore the liability established by the proof of claim allowed pursuant to the order confirming plan is res judicata. Alternatively, Wilshire argues that the debtor failed to rebut the presumption of the validity of Wilshire's proof of claim and therefore the claim should be allowed as filed. Wilshire contends that the summary judgment of foreclosure is a valid judgment that establishes the debtor's liability.

With respect to the debtor's set-off claims, Wilshire argues that it fully performed all of its obligations under RESPA and is therefore not liable to the debtor.

Wilshire argues that the debtor has failed to establish cause to reconsider Wilshire's claim as allowed by the order confirming plan, relying on In re Gomez, 250 B.R. 397, 401 (Bankr.M.D.Fla. 1999). In that case, the court held that a debtor objecting after confirmation to a claim deemed allowed without objection in a confirmed plan must first establish cause for the claim's reconsideration. Id. The court noted, however, that "[s]ubstantial discretion exists in deciding whether to grant a motion to reconsider a claim under § 502(j) [of the Bankruptcy Code]." Id.

In determining whether cause exists to reconsider an allowed claim, the court must consider several factors, including "(1) the extent and reasonableness of the delay, (2) the prejudice to any party in interest, (3) the effect on efficient court administration, and (4) the moving party's good faith." Id.

In this case, the debtor has clearly established sufficient cause to object to Wilshire's claim post-confirmation under all of these factors. To begin with the obvious, the proof of claim itself was untimely filed less than 30 days prior to the confirmation hearing. As a practical matter, the debtor had no viable opportunity to raise his objection to that claim prior to the confirmation hearing. Upon receipt of the proof of claim, the debtor immediately sent a letter to the creditor requesting information and putting the creditor on notice that he questioned the amounts requested in the claim. The debtor subsequently filed a number of motions that made clear his opposition to the proof of claim as filed. In addition, upon the transfer of his account, the debtor corresponded with Wilshire about his questions and concerns about its claim. The debtor has been tenacious in his efforts to effectuate a resolution of his objections to the claim. The delay here is on the creditor's part — not the debtor's.

In addition, Wilshire is not prejudiced by the court's determination of the debtor's objection to its claim post-confirmation. Wilshire has no claim for prepetition arrearages and is not receiving payments under the plan. The debtor instead has simply continued his prepetition practice of paying his monthly installments when they become due. As a consequence, the debtor's post-confirmation objection to Wilshire's claim has caused no interruption to the bank's receipt of monies due under the note.

Nor is the court's administration of the bankruptcy case adversely affected by its determination of the debtor's objection post-confirmation. Indeed, it is a regular practice in this court to determine objections to claims filed in Chapter 13 cases post-confirmation.

Finally, the debtor has demonstrated repeatedly throughout this bankruptcy case his good faith intention to put into issue and resolve his objections to the claims of his creditors.

The court accordingly determines that the debtor has established ample cause to reconsider Wilshire's claim post-confirmation.

2. Has the debtor rebutted the presumption of the validity of Wilshire's claim?

In this objection to claim, the court must determine the amount owed by the debtor to Wilshire as of the petition date, including arrearages, if any. The court is not here concerned with the debtor's post-petition payments to Metropolitan and Wilshire.

Rule 3001(f) of the Federal Rules of Bankruptcy Procedure provides that "[a] proof of claim executed and filed in accordance with [the Federal Rules of Bankruptcy Procedure] shall constitute prima facie evidence of the validity and amount of the claim." The party objecting to the claim has the burden of going forward with equivalent probative evidence to rebut the presumption of validity and amount. In re Fleming, 258 B.R. 488, 489 (Bankr.M.D.Fla. 2000). Once the objecting party has rebutted the presumption, the claimant has the ultimate burden of proving its claim. In re Homelands of DeLeon Springs, Inc., 190 B.R. 666, 668 (Bankr.M.D.Fla. 1995), citing In re VTN, Inc., 69 B.R. 1005, 1008 (Bankr. S.D. Fla. 1987).

In this case, the court admitted without objection the debtor's evidence as to his loan account with Metropolitan and then Wilshire. The debtor's evidence supported the debtor's contention that he made payments prepetition that were not credited to his loan obligation. The debtor also put into evidence Wilshire's transfer of servicing notice. That transfer of servicing notice establishes a principal balance as of October 1, 2000, that is substantially less than the amount sought by Wilshire in its proof of claim. The court credits this evidence and concludes that the debtor has met his burden of rebutting the presumptive validity and amount of Wilshire's claim. Accordingly, Wilshire bears the burden of persuasion as to the validity and amount of its claim.

Wilshire has offered in support of its claim the original loan documents and the summary judgment of foreclosure attached to its proof of claim. Wilshire contends that the summary judgment of foreclosure establishes the amount and validity of the amounts owed to Wilshire under the doctrine of res judicata. The principle of res judicata is not helpful in establishing the amount of Wilshire's claim at the time of filing, however, because the state court entered its judgment on March 17, 1999, and the evidence reflects that the debtor made payments on the loan obligation after the date of the judgment. In re Giordano, 234 B.R. 645, 649 (Bankr. E.D. Pa. 1999).

Instead, the doctrine of collateral estoppel is the appropriate means by which the court can determine the debtor's liability to Wilshire. Under that doctrine, the defendant is precluded from collaterally attacking a fact or issue determined in the prior proceeding if four elements are met.

These four elements are:

(1) the issue at stake must be identical to the one involved in the prior litigation;

(2) the issue must have been actually litigated in the prior suit; (3) the determination of the issue in the prior litigation must have been a critical and necessary part of the judgment in that action; and (4) the party against whom the earlier decision is asserted must have had a full and fair opportunity to litigate the issue in the earlier proceeding.

Dixie National Life Insurance Co. v. McWhorter (In re McWhorter), 887 F.2d 1564, 1566 (11th Cir. 1989).

In this case, each of these elements is met. The objection to claim deals with the identical issue of the debtor's liability and obligations under the note and mortgage. The state court determined that issue. The court's determination of that issue was a critical and necessary part of the state court summary judgment of foreclosure. Finally, the debtor had a full and fair opportunity to litigate that issue in the state court proceeding and in fact did so zealously.

Accordingly, the court determines that the debtor is collaterally estopped from disputing the validity and amount of his indebtedness to Wilshire, including attorney's fees and costs, as set forth in the summary judgment of foreclosure. Accordingly, the court concludes that, as of February 23, 1999, the debtor was obligated to Wilshire for $31,940.51 in principal, $1,686.98 in interest, and $2,569 in attorney's fees and costs.

The inquiry, however, does not stop there. The summary judgment of foreclosure was entered on March 17, 1999, and contained amounts due to Metropolitan (now Wilshire) as of February 23, 1999. Wilshire is required to establish the amount of its claim as of the petition date, September 2, 1999. Wilshire suggests that this can be easily accomplished by adding an additional $1,905.57 to the judgment amount, representing interest from February 23, 1999, through the date of the bankruptcy filing. Not surprisingly, the debtor vehemently rejects this approach.

As the party with the burden of persuasion, Wilshire is required to do more than make mathematical adjustments to its claim as established on February 23, 1999. It must offer evidence of the amount actually owed as of the petition date. This it has failed to do.

On the other hand, the debtor has offered evidence that he made all prepetition payments on his second mortgage loan and was current on the date of the bankruptcy filing. The court admitted the evidence without objection. The court credits that evidence. The evidence is corroborated by the fact that neither Metropolitan nor Wilshire filed a proof of claim asserting an arrearage on the mortgage to be paid through the Chapter 13 plan. Thus, on the evidence presented, it is apparent that the only default on the second mortgage that led to its foreclosure was the debtor's default under the first mortgage.

On the evidence, the court must therefore find that the debtor was current under the terms of the note and mortgage on his payments of principal and interest as of the petition date. The issue of attorney's fees and costs, however, cannot be determined so easily.

The debtor has offered no evidence to rebut Wilshire's claim for attorney's fees and costs as determined in the summary judgment of foreclosure. Instead, the debtor argues that the order canceling the foreclosure sale "effectively vacated" the summary judgment of foreclosure and reinstated his loan.

The debtor misconstrues the legal effect of that order. The order, on its face, does nothing more than cancel the scheduled foreclosure sale. It does not vacate the summary judgment of foreclosure. The debtor did not appeal the judgment or file a motion seeking relief from the judgment. The summary judgment of foreclosure is therefore a final adjudication of the foreclosure action between Metropolitan (now Wilshire) and the debtor.

No sale of the debtor's real property has yet occurred. The debtor therefore retains his right of redemption pursuant to Section 45.0315, Florida Statutes. Section 45.0315 provides that the "mortgagor . . . may cure the mortgagor's indebtedness and prevent a foreclosure sale by paying the amount of moneys specified in the [foreclosure] judgment . . . plus the reasonable expenses of proceeding to foreclosure incurred to the time of tender, including reasonable attorney's fees of the creditor." See, e.g., Sun First National Bank of Orlando v. R.G.C., 348 So.2d 620, 621 (Fla. 4th DCA 1977)[holding that mortgagor had to pay the entire mortgage debt rather than lower successful bid price to redeem].

The Bankruptcy Code, however, provides an alternative to redemption under state law. Section 1322(c) of the Bankruptcy Code permits a debtor to reinstate the debtor's mortgage by curing the default that gave rise to the foreclosure judgment through the plan. 3 L. King, Collier on Bankruptcy, ¶ 1322.09[6] (15th ed. rev. 2000). See, e.g., In re Jaar, 186 B.R. 148, 150 (Bankr.M.D.Fla. 1995)["[A] default in a home mortgage may be cured, and the mortgage reinstated, through a chapter 13 plan, until the residence is sold at a foreclosure sale that is conducted in accordance with nonbankruptcy law."]. This is, of course, the alternative that the debtor here has chosen.

Had Metropolitan or Wilshire asserted an arrearage claim in its proof of claim, it could have included the attorney's fees and costs assessed in the summary judgment of foreclosure in the arrearage claim. The debtor would then have had to pay those fees and costs through the plan in order to reinstate the mortgage. The problem here, however, is that Metropolitan did not assert a prepetition arrearage claim in any amount. Similarly, the order confirming plan did not provide for the payment to Metropolitan (now Wilshire) of a prepetition arrearage claim through the plan. Wilshire is therefore unable to collect its prepetition attorney's fees and costs from the debtor through the debtor's Chapter 13 bankruptcy case. Upon completion of his plan, the debtor will have reinstated his mortgage with Wilshire under its original terms and conditions, regardless of whether the debtor has satisfied his prepetition obligation to pay attorney's fees and costs to Wilshire.

On the other hand, the debtor remains obligated to Wilshire for $2,569 in prepetition attorney's fees and costs as established in the judgment. Wilshire's claim for attorney's fees will not be discharged under Section 1328 of the Bankruptcy Code because it was (1) not provided for under the plan; (2) not disallowed under Section 502 of the Bankruptcy Code; and (3) not excludable in any event under Section 1322(b)(5) of the Bankruptcy Code. Telfair v. First Union Mortgage Corp., 216 F.3d 1333, 1337 n. 8 (11th Cir. 2000). This claim will therefore survive the Chapter 13 discharge, if entered, and will continue to accrue interest at the rate applicable to the state court judgment that established it.

For these reasons, the court concludes that Wilshire has failed to establish by a preponderance of the evidence its entitlement to the amount claimed in its proof of claim. The court therefore sustains the debtor's objection to Wilshire's claim.

B. RESPA CLAIMS 1. Did Wilshire violate RESPA Section 2605(e)?

RESPA is a remedial consumer protection statute and as such is to be construed liberally. Rawlings v. Dovenmuehle Mortgage, Inc., 64 F. Supp.2d 1156, 1165 (M.D.Ala. 1999). The debtor, as the moving party, has the burden of persuasion to show that Wilshire has failed to fulfill its obligations pursuant to Section 2605.

Section 2605(e) of RESPA governs how and when a loan servicer must respond to its borrower's complaints about the servicing of the loan. It provides that:

(e) Duty of loan servicer to respond to borrower inquires

(1) Notice of receipt of inquiry

(A) In general

If any servicer of a federally related mortgage loan receives a qualified written request from the borrower (or an agent of the borrower) for information relating to the servicing of such loan, the servicer shall provide a written response acknowledging receipt of the correspondence within 20 days (excluding legal public holidays, Saturdays, and Sundays) unless the action requested is taken within such period.

(B) Qualified written request

For purposes of this subsection, a qualified written request shall be a written correspondence, other than notice on a payment coupon or other payment medium supplied by the servicer, that —

(i) includes, or otherwise enables the servicer to identify, the name and account of the borrower; and

(ii) includes a statement of the reasons for the belief of the borrower, to the extent applicable, that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

(2) Action with respect to inquiry Not later than 60 days (excluding legal public holidays, Saturdays, and Sundays) after receipt from any borrower of any qualified written request under paragraph 91) and, if applicable, before taking any action with respect to the inquiry of the borrower, the servicer shall —

(A) make appropriate corrections in the account of the borrower, including the crediting of any late charges or penalties, and transmit to the borrower a written notification of such correction (which shall include the name and telephone number of a representative of the servicer who can provide assistance to the borrower);

(B) after conducting an investigation, provide the borrower with a written statement or clarification that includes —

(i) to the extent applicable, a statement of the reasons for which the servicer believes the account of the borrower is correct as determined by the servicer; and

(ii) the name and telephone number of an individual employed by, or the office or department of, the servicer who can provide assistance to the borrower; or

(C) after conducting an investigation, provide the borrower with a written explanation or clarification that includes —

(i) information requested by the borrower or an explanation of why the information requested is unavailable or cannot be obtained by the servicer; and

(ii) the name and telephone number of an individual employed by, or the office or department of, the servicer who can provide assistance to the borrower.

The debtor claims that Wilshire violated RESPA's provisions contained in Section 2605(e)(1) and (e)(2) after the filing of his bankruptcy case. The debtor argues that he sent qualified written requests to Wilshire on October 26, 2000, and on January 19, 2001, asserting post-petition failures in his account and that, because Wilshire did not respond appropriately as required by Section 2605(e)(1) and (e)(2), it has committed four violations of RESPA.

The debtor must first establish that his letters written to Wilshire in October 2000 and January 2001 are qualified written requests. Each letter included the debtor's name and account number enabling Wilshire to identify with specificity the account at issue. The debtor has therefore satisfied Section 2605(e)(1)(B)(i). Both letters include a statement of the debtor's reasons for his belief that errors existed with respect to his loan account and provide sufficient detail to enable the servicer to investigate the debtor's complaints. The debtor has therefore demonstrated that both letters also satisfied Section 2605(e)(1)(B)(ii). Accordingly, the court concludes that the debtor has established that the October and January letters are qualified written requests within the meaning of Section 2605(e)(1)(B).

The debtor must next establish that Wilshire failed to fulfill its obligations triggered by the receipt of those letters. The debtor first contends that Wilshire failed to acknowledge receipt of either letter within 20 days as required by Section 2605(e)(1)(A). Wilshire does not contravene this contention. The court therefore concludes that the debtor has established that Wilshire has committed two violations of Section 2605(e)(1)(A).

The debtor must next demonstrate that Wilshire failed to comply with Section 2605(e)(2). The debtor contends that Wilshire is in violation of Section 2605(e)(2) because it did not credit to his account payments he made within 60 days of its receipt of the debtor's written qualified requests. Wilshire argues that its December 13, 2000, letter demonstrates that it conducted an investigation as to the validity of the amounts owed and included supporting documentation of its findings in compliance with Section 2605(e)(2)(B) and (C).

On the record before it, the court cannot determine whether Wilshire fulfilled its obligations under RESPA. It is unclear from Wilshire's letter, for example, whether the bank fully investigated the debtor's assertions that he made 37 payments on the loan or, if it did, what conclusions it reached. The supporting documentation included with the December 13, 2000, letter might shed some light on this issue, but it is not in evidence. Because the debtor has the burden of persuasion on the RESPA claims, it is his obligation to offer evidence in support of his contention that Wilshire failed to comply with Section 2605(e)(2). The debtor has not met his burden with respect to his October 26, 2000, letter. The court therefore determines that Wilshire did not violate Section 2605(e)(2) in connection with its response to this letter.

This is not the case, however, with the debtor's letter of January 19, 2001. In that letter, the debtor asserted that the breakdown provided in Wilshire's December 13, 2000, letter failed to credit specific payments he had made. The debtor contended in that letter that he was current in his payments as of November 2000. The court credits that evidence. It is undisputed that Wilshire failed to take any action in response to that letter. Accordingly, the court concludes that the debtor has established by a preponderance of the evidence that Wilshire committed one violation of Section 2605(e)(2) for its failure to take the action contemplated under that section within 60 days of its receipt of the debtor's letter of January 19, 2001.

2. Did Wilshire violate RESPA Section 2605(b)(3)(G)?

The debtor makes a second RESPA claim against Wilshire pursuant to Section 2605(b)(3)(G). That provision requires that the notice of transfer must state that "the assignment, sale, or transfer of the mortgage loan does not affect any term or condition of the security instruments other than terms directly relating to the servicing of the loan." The debtor contends that Wilshire's demand that he procure flood insurance is a change in the term or condition of the security instruments. Wilshire did not respond to this contention.

The RESPA provision upon which the debtor is relying dictates the contents of the notice that is provided to the mortgagor upon the transfer of the debtor's loan account. The debtor's contention, however, is that Wilshire violated RESPA when it required and force placed the flood insurance. Assuming for the moment that Wilshire did modify the terms of the contract by force placing flood insurance, RESPA does not provide a remedy for a breach of the loan documents. In any case, the debtor has failed to present any evidence that Wilshire did indeed change the terms of the loan. On the record before it, therefore, the court concludes that the debtor has failed to establish a RESPA violation for Wilshire's imposition of force placed flood insurance, if such insurance was in fact imposed on the debtor.

3. Has the debtor established actual damages?

The debtor has established that Wilshire has committed three RESPA violations. Pursuant to Section 2605(f), he is therefore entitled to his actual damages for each violation. Rawlings, 64 Supp.2d at 1163-64. The debtor has the burden of persuasion as to the amount of actual damages he is claiming. Id.

The debtor has presented a general claim for damages. He does not assert the basis for his claim or delineate the party against whom he asserts the damages (Document No. 109). In that damages claim, the only amount sought that could be applicable to the debtor's RESPA claims against Wilshire is his demand for $56,500 for "2d mortgage payments with present balance" and some portion of the $12,000 for "Insurances, hazard, wind, flood." Apparently, the debtor is simply seeking a return of his payments, with interest, on the second mortgage and on insurance. The debtor has provided no justification, and more importantly, no evidence in support of these requested amounts on any theory of damages.

In short, he has offered no evidence of any damages proximately caused by Wilshire's violations of RESPA. The debtor is therefore not entitled to recover damages for Wilshire's violations.

The debtor has established, however, that Wilshire failed to credit post-petition payments made in payment of amounts due for October through November of 1999 and January through November of 2000. Accordingly, Wilshire must credit these payments to the debtor's loan obligation.

IV. CONCLUSION

For the reasons stated above, the court has determined that the debtor's objection to Wilshire's claim should be sustained. In addition, the court has determined that the debtor has established that Wilshire committed three violations under RESPA but failed to establish any actual damages for those violations other than Wilshire's failure to properly credit his account.

Accordingly, the court orders as follows:

1. The debtor's objection to Claim No. 3 is sustained. As of September 2, 1999, Wilshire shall have an allowed secured claim in the amount that would be due under the original terms of the loan according to the original amortization of the loan according to the loan documents. The debtor shall be credited with making all payments timely when due through and including the payment due on September 1, 1999. This claim is allowed in this bankruptcy case but is neither provided for nor to be paid through the plan. Wilshire shall retain its mortgage lien.

2. As of September 2, 1999, Wilshire shall also have a secured claim in the amount of $2,569 for prepetition attorney's fees and costs. Wilshire is entitled to interest on the claim at the rate applicable to the judgment of foreclosure entered on March 17, 1999, from February 23, 1999, to the date paid. This claim is allowed in this bankruptcy case but is neither provided for nor to be paid through the plan. It shall therefore survive any discharge entered in this bankruptcy case. Wilshire shall retain its judgment lien for this amount until paid notwithstanding the fact that the mortgage shall be cured and reinstated upon the completion of the debtor's plan.

3. Wilshire is further directed to provide an accounting to the debtor of his mortgage loan that credits the debtor's account as paid timely up to and through November 1, 2000, and that further reflects any and all payments received after that date and through the date of the entry of this order.

4. Wilshire shall also promptly provide to the debtor a current amortization schedule consistent with the terms of this order.

5. The debtor's objection to claim, including his claim for damages for RESPA violations, is otherwise overruled.

ORDER DETERMINING DEBTOR'S OBJECTION TO CLAIM NO. 4

This case came on for final evidentiary hearing on June 1 and July 16, 2001, of the debtor's second amended objection to Claim No. 4 of Washington Mutual Bank ("Washington Mutual" or "bank") (Document Nos. 81 and 84). At the conclusion of a full day and a half evidentiary hearing, the court requested post-hearing memoranda. The debtor filed a brief (Document No. 109) on August 28, 2001. Washington Mutual filed a brief (Document No. 113) on September 4, 2001. The debtor filed a supplemental response to Washington Mutual's brief (Document No. 114) on September 5, 2001.

This is a Chapter 13 case. Washington Mutual holds the first mortgage on the debtor's homestead. The debtor objects to the allowance of Washington Mutual's claim on several theories and seeks additional damages for the bank's alleged violations of the Truth in Lending Act. This controversy is a small piece of a continuing, contentious, and hotly contested conflict between the debtor and Washington Mutual, most of which has been fought and determined in state court.

After considering all of the testimony, particularly the demeanor and credibility of the witnesses, the exhibits admitted at trial, the pleadings and written arguments of the parties, including the authorities cited by the parties, the court determines that the debtor's objection to Washington Mutual's claim should be sustained in part and overruled in part. The court further determines that the debtor has failed to establish that Washington Mutual violated the provisions of the Truth in Lending Act.

I. BACKGROUND

The debtor made a loan application to Great Western Bank ("Great Western") on April 14, 1988, for a purchase money mortgage loan (Debtor's Exhibit No. 28). At that time, the parties executed a good faith estimate of settlement charges (Debtor's Exhibit No. 29). Great Western provided to the debtor an unsigned description of the various loan programs offered by Great Western (Debtor's Exhibit No. 26) and an unsigned initial calculation of specific finance options available to him (Debtor's Exhibit No. 27). The debtor also signed a loan disclosure (Bank's Exhibit 6 and Debtor's Exhibit No. 30) that included a disclosure of Great Western's right to require an escrow account at any time. Neither document contained a provision that described how Great Western treated partial payments or its use of a suspense account.

Great Western executed a loan commitment (Bank's Exhibit No. 9 and Debtor's Exhibit No. 31) on April 22, 1988. Great Western did not give the debtor any notice of rescission rights.

The parties closed the loan on June 24, 1988. At the closing, the debtor and his wife signed a promissory note (Bank's Exhibit 2 and Debtor's Exhibit No. 19) and a mortgage (Bank's Exhibit No. 3 and Debtor's Exhibit No. 20), among other papers (Bank's Exhibit Nos. 5, 7, and 8). The promissory note provided for the debtor's payment of collection costs and attorney's fees. The mortgage authorized the bank to force place insurance under specific circumstances and also to require an escrow account at any time.

The mortgage loan related to the debtor's purchase of a home. The debtor made a down payment on the purchase price of the home in the amount of $36,000. In making this substantial down payment, the debtor was motivated by his desire to keep his indebtedness for the home purchase below the loan to value level that would require an escrow account to pay taxes and insurance in advance. He instead preferred to pay his taxes and insurance directly as they became due. The debtor had recently retired and was starting a small machine shop. He anticipated fluctuation in the revenues from that business and wanted to have the flexibility of paying his tax and insurance obligations annually rather than in monthly payments.

The debtor financed the remaining $116,200 of the purchase price with an adjustable rate mortgage. Following the closing of the loan, the debtor commenced payment on the mortgage loan and everything proceeded satisfactorily between the debtor and Great Western for several years.

By early 1993, however, the debtor had become seriously delinquent on his property taxes. Great Western paid the delinquent taxes (of several years) on his behalf (Bank's Exhibit No. 13). It then provided the debtor with an opportunity to repay those tax payments over a 48 month period without interest (Bank's Exhibit No. 13). Alternatively, the debtor could avoid the imposition of an escrow account by paying to the bank the full balance of the delinquent tax payments paid on the debtor's behalf by the bank. The debtor did not repay the delinquent taxes to the bank, and in February 1993 Great Western notified the debtor that it now required that a tax escrow account be established (Bank's Exhibit No. 12 and Debtor's Exhibit No. 33). The debtor was extremely unhappy with these developments.

In 1995, Great Western also sent a letter to the debtor asking for proof of hazard insurance and stating its intention to force place insurance if the debtor did not comply (Debtor's Exhibit No. 41 and Bank's Exhibit No. 10). The debtor apparently attempted to procure insurance with his carrier but was unable to do so due to the carrier's change in its underwriting policies in the wake of Hurricane Andrew (Debtor's Exhibit No. 42 and Document No. 93, transcript of hearing held on June 1, 2001, at 165, lines 5-20).

At some point thereafter, the debtor unsuccessfully attempted to persuade Great Western to discontinue the escrow account. (Document No. 93, transcript of June 1, 2001, hearing, at 158, lines 21-25, and at 159, lines 1-24). He also wrote many letters to the bank about other problems he perceived about the way in which his loan account was being handled (Debtor's Exhibit Nos. 13, 19, and 20).

Unable to resolve these perceived problems through correspondence with the bank, the debtor began to send payments in the amount that he believed was due, often deducting the escrow account payment, rather than the scheduled payment. The bank treated these payments as partial payments and put them into a suspense account. When the suspense account contained sufficient monies to make a full payment, the bank would credit the debtor's account. Not surprisingly, the debtor began to accumulate late fees and delinquencies in payments, thereby exacerbating his problems with the bank.

In 1997, Great Western initiated a foreclosure action against the debtor in state court seeking to foreclose its mortgage on the debtor's homestead. The action was ultimately dismissed for Great Western's failure to effectuate service of process on the debtor. While the foreclosure action was pending, Great Western sold the debtor's loan to Washington Mutual.

In 1998, Washington Mutual sent a letter to the debtor (Bank's Exhibit No. 11) asking for proof of hazard insurance and stating its intention to force place insurance if the debtor did not comply.

In 1998, Washington Mutual also initiated a second foreclosure action in state court, Case No. 98-6757CI-SEC-11, seeking to foreclose its mortgage on the debtor's homestead. Washington Mutual asserted that the debtor had defaulted on his obligations to the bank by failing to make his payment for April 1998 and all subsequent payments. The debtor vigorously opposed the foreclosure action. After a lengthy trial, the court entered judgment in favor of the bank on August 8, 1999 (Bank's Exhibit No. 4), in the amount of $118,648.71.

The judgment amount was comprised of $98,344.78 in principal, $9,985.90 in pre-judgment interest through August 5, 1999, $732.92 in late fees, $1,495.06 in escrow advances, $62.22 in property inspection fees, $185 for a supplemental title search, $149.50 for foreclosure filing fee, $156 for service of process costs, $30 in corporate search fees, and $7,500 in attorney's fees through August 5, 1999.

The judgment also scheduled a foreclosure sale of the debtor's homestead for September 10, 1999. In preparation for that sale, Washington Mutual obtained a broker's price opinion (Bank's Exhibit No. 15) that established a market value for the debtor's homestead "as is" of between $200,000 and $230,000.

On September 2, 1999, the debtor filed a petition under Chapter 13 of the Bankruptcy Code to reorganize his debts and to stay the foreclosure sale. In his Chapter 13 plan (Document No. 2), the debtor proposed to pay the arrearage claim of Washington Mutual without interest over 36 months or the life of the plan. The court set January 3, 2000, as the last date to file proofs of claim.

Washington Mutual timely filed a proof of secured claim (Claim No. 2) in the amount of $115,671.21 (an amount less than the foreclosure judgment) on October 29, 1999. The proof of claim included an arrearage claim in the amount of $23,199.14, comprised of $17,859.60 for 18 prepetition payments of principal, interest, and escrow advances, $784.75 in late fees, $4,275.28 in foreclosure fees (an amount substantially less than the fees and costs awarded in the foreclosure judgment), $50 for a proof of claim filing fee, $160 for broker's price opinion costs, and $69.50 in property inspection fees.

Washington Mutual also filed a motion for relief from stay (Document No. 12) seeking to conclude its foreclosure sale, to defend against the debtor's appeal of the foreclosure judgment, and to defend against the debtor's civil action against it. In its motion, Washington Mutual did not assert that the debtor was in default of his obligation to make post-petition payments on the mortgage loan. The debtor filed a response (Document No. 15) seeking dismissal of the motion for relief from stay. Washington Mutual filed a statement in compliance of preliminary hearing order (Document No. 16) stating an amount due that included interest through November 24, 1999, at a per diem rate of $18.40 and crediting a payment of $980.

The court conducted a hearing of the contested motion to modify stay and, on December 22, 1999, entered an order modifying the automatic stay and granting adequate protection (Document No. 18). That order modified the automatic stay to permit Washington Mutual to defend against the debtor's civil action and the debtor's appeal of the foreclosure judgment but prohibited the sale of the debtor's homestead or the enforcement of any judgment obtained. The order also granted adequate protection of regular contract payments to Washington Mutual during the post-petition period. The order required the debtor to give proof of insurance on request and to provide access to the property for inspection purposes. Finally, the order contained default provisions by which Washington Mutual could obtain final relief from the automatic stay upon the debtor's default of the terms of that order.

The court confirmed the debtor's plan (Document No. 27) on June 13, 2000. The order confirming plan provided that the debtor would cure Washington Mutual's prepetition arrearage claim through the plan without interest in 36 months or until the claim was paid in full. The court entered an order allowing and disallowing claims and ordering disbursements (Document No. 37) on August 31, 2000.

The debtor immediately commenced filing a series of motions and objections seeking to put into issue his objections to the claims of Washington Mutual and other creditors (Document Nos. 39A, 44, 48, and 54). All of these motions and objections were denied by the court for procedural reasons. The debtor also sent a number of letters detailing his complaints and concerns about his account to Washington Mutual.

The state appellate court affirmed Washington Mutual's foreclosure judgment sometime in June 2000. The appellate court granted attorney's fees to Washington Mutual for services performed in defending the appeal in an amount to be determined by the state trial court. (Debtor's Exhibit No. 65).

On January 18, 2001, the debtor filed a motion to compel answers of Washington Mutual and for sanctions (Document No. 52) and a duplicate motion (Document No. 62). The court conducted a preliminary hearing of the motions on February 28, 2001. The court was under the impression that the matters at issue in the motions were to be substantively addressed at the June 1, 2001, hearing of the debtor's objection to Washington Mutual's claim and so treated the duplicate motions as a discovery dispute. The court denied the motions without prejudice (Document No. 71).

On February 13, 2001, the debtor filed an objection to Washington Mutual's claim (Document No. 64). Washington Mutual filed a response to the debtor's objection (Document No. 73). The court conducted a preliminary hearing on April 4, 2001, of the debtor's objection and scheduled it for final evidentiary hearing on June 1, 2001. At the preliminary hearing, Washington Mutual indicated its intention to file an amended proof of claim. The court directed that the amended claim be filed promptly.

Washington Mutual immediately filed its amended proof of claim (Claim No. 4) on April 5, 2001, in the amount of $131,536.71. Washington Mutual attached to the proof of claim a copy of the debtor's promissory note, mortgage deed, and its attorney's post-petition time records. The proof of claim included an arrearage claim in the amount of $39,064.64, comprised of $17,859.60 for 18 prepetition payments of principal, interest, and escrow advances, $784.76 in late fees, $50 for a proof of claim filing fee, $160 for broker's price opinion costs, $69.50 in property inspection fees, $185 for supplemental title search, $149.50 for foreclosure filing fee, $156 for service of process, $30 in corporate search fees, $60.28 for a publication of sale, and $19,485 in attorney's fees ($7,500 in prepetition attorney's fees and $11,985 in post-petition attorney's fees) and $75 for the motion for relief from stay filing fee.

Claim No. 4 therefore amended Claim No. 2 in two respects. First, it included fees and costs assessed in the foreclosure judgment that had not been included in the earlier claim. Second, it included post-petition attorney's fees.

The debtor filed an amended objection to Washington Mutual's claim (Document No. 81) taking issue with the amounts requested in Claim No. 4. The debtor filed a second amended objection (Document No. 84) on May 25, 2001.

As part of its routine practice, the court granted the Chapter 13 trustee's objection to the amended claim as untimely filed (Document No. 80) and disallowed the amended claim. The trustee obviously mistakenly filed this objection not knowing that the court had authorized Washington Mutual to amend its claim. The court also mistakenly granted the motion not realizing the fact that it had already placed this case on a trial track. Washington Mutual filed a motion for reconsideration of that order (Document No. 85) on May 25, 2001, reciting that the court had made an obvious mistake. The court granted the motion, acknowledged the obvious mistake, and vacated the order disallowing the claim (Document No. 86) on May 31, 2001. The clerk gave the debtor and counsel for Washington Mutual copies of that order at the beginning of the evidentiary hearing on June 1, 2001. The court then devoted an entire day to receiving the testimony and evidence.

After the conclusion of the June 1, 2001, hearing the debtor filed a motion to reopen the evidence (Document No. 89) claiming surprise and prejudice because of the late entry of the order granting reconsideration and vacating the mistakenly entered order disallowing Claim No. 4. In the motion, the debtor sought a hearing to offer additional evidence and to re-examine the bank's witnesses. Washington Mutual filed a response in opposition to the debtor's motion (Document No. 90). The court granted the motion in part and scheduled a further hearing to allow the debtor to put on additional evidence but denied the motion in all other respects (Document No. 94). The court conducted that hearing on July 16, 2001.

The debtor filed a motion to reconsider the court's order granting in part the motion to reopen the evidence (Document No. 99). At the beginning of the July 16, 2001, hearing, the court ruled orally on that motion. The court denied the motion because the debtor had clearly cross-examined the bank's witnesses with respect to the amendments in Claim No. 4 at the earlier hearing (Document No. 92, transcript of hearing held on June 1, 2001, at 52-57, and Document No. 93, transcript of hearing held on June 1, 2001, at 121-128). The court also noted that any benefit that would inure to the debtor in re-examining the witnesses, if they could be subpoenaed, would be greatly offset by the inconvenience and expense of recalling the witnesses. (Document No. 101, transcript of hearing held on July 16, 2001, at 11, lines 10-25, and at 12, lines 1-10).

II. ISSUES

First, the debtor contends that the bank has failed to substantiate its claim for post-judgment fees and costs requested in its claim.

Second, the debtor contends that he should not have to pay post-petition attorney's fees and costs through his Chapter 13 plan. In addition, the debtor argues that Washington Mutual's attorney's fees requested in its proof of claim are inflated and unreasonable.

Third, the debtor asserts two set-off claims for damages for alleged violations of Sections 121 and 125(a) of the Truth in Lending Act, 15 U.S.C. § 1631 and 1635(a). In his first set-off claim, the debtor contends that Great Western failed to provide a full and meaningful disclosure of the terms of the mortgage loan, as required by Section 121 of the Truth in Lending Act, 15 U.S.C. § 1631, and Regulation Z, 12 C.F.R. § 226.18, especially with respect to the bank's ability to require the escrow of advanced tax and insurance payments, the bank's use of a suspense account to hold partial payments, the bank's ability to impose force placed insurance, and the debtor's potential legal costs and rights in case of a dispute.

For his second set-off claim, the debtor contends that Great Western failed to provide notice of the debtor's rescission rights as required by Section 125(a) of the Truth in Lending Act, 15 U.S.C. § 1635(a), and the debtor is thus entitled to damages pursuant to Section 125(b) of the Truth in Lending Act, 15 U.S.C. § 1635(b).

III. DISCUSSION

In this objection to claim, the court must determine the amount owed by the debtor to Washington Mutual as of the petition date, including the amount of prepetition arrearages that the debtor must pay through the plan to cure and reinstate the mortgage. The court must also determine Washington Mutual's entitlement to attorney's fees and post-petition costs to be paid through the plan. The court is not here concerned, however, with the debtor's post-petition payments to Washington Mutual.

A. DEBTOR'S OBJECTION TO PREPETITION ARREARAGE

Section 502(a) of the Bankruptcy Code provides that a "claim or interest, proof of which is filed under section 501 of this title, is deemed allowed, unless a party in interest . . . objects." The debtor has done so here.

Rule 3001(a) dictates that the proof of claim filed "shall conform substantially to the appropriate Official Form." F.R.B.P. 3001(a). Similarly, the directions to Official Form 10, Proof of Claim, provide that "[c]reditors must attach to the proof of claim form copies of any documents showing that the debtor owes the debt claimed or, if the documents are too lengthy, a summary of those documents."

Washington Mutual attached to its amended claim a copy of the promissory note and mortgage that established the debtor's contractual obligations to the bank. Washington Mutual also attached a copy of its attorney's time records for work performed in connection with its defense of the debtor's appeal of the foreclosure judgment and its protection of the bank's secured claim in the debtor's bankruptcy case. Washington Mutual did not attach a copy of the foreclosure judgment.

Rule 3001(f) of the Federal Rules of Bankruptcy Procedure provides that "[a] proof of claim executed and filed in accordance with [the Federal Rules of Bankruptcy Procedure] shall constitute prima facie evidence of the validity and amount of the claim." The party objecting to the claim has the burden of going forward with equivalent probative evidence to rebut the presumption of validity and amount. In re Fleming, 258 B.R. 488, 489 (Bankr.M.D.Fla. 2000). Once the objecting party has rebutted the presumption, the claimant has the ultimate burden of proving its claim. In re Homelands of DeLeon Springs, Inc., 190 B.R. 666, 668 (Bankr.M.D.Fla. 1995), citing In re VTN, Inc., 69 B.R. 1005, 1008 (Bankr. S.D. Fla. 1987).

The debtor here has testified under oath as to his belief that the amounts sought by Washington Mutual are unsupported and/or unreasonable. In the absence of any documentary evidence of those amounts filed with the proof of claim, the court concludes that the debtor has met his burden in rebutting the presumption of validity of Claim No. 4. Accordingly, Washington Mutual bears the burden of establishing the amount and validity of its claim.

1. Mortgage Foreclosure Judgment Amounts

At the hearing, the court admitted into evidence the final judgment of foreclosure in favor of Washington Mutual (Bank's Exhibit No. 4). That judgment establishes a substantial portion of the amounts claimed by Washington Mutual in Claim No. 4). Other than the post-petition attorney's fees, the only amounts requested by Washington Mutual in its proof of claim that are not supported by the judgment are $44.84 for one late fee, $6.95 for one property inspection fee, $60.28 for the publication of foreclosure sale, $160 for two broker's opinion fees, $50 paid for fee to prepare a proof of claim, and $75 filing fee for motion for relief from stay.

Washington Mutual contends that the foreclosure judgment establishes the debtor's liability as to all amounts awarded in the judgment under the doctrine of res judicata. "Res judicata precludes reexamination not only of liability for a debt, but also its amount as well." Ob/Gyn Solutions, L.C. v. Six (In re Six), 80 F.3d 452, 456 (11th Cir. 1996). "When res judicata is invoked to give preclusive effect to a state court judgment, [the bankruptcy court] must apply state law." Id.

Res judicata bars relitigation of the debtor's liability and amount owed to Washington Mutual as of August 5, 1999, if four elements are met: "(1) there must be a final judgment on the merits, (2) the decision must be rendered by a court of competent jurisdiction, (3) the parties, or those in privity with them, must be identical in both suits; and (4) the same cause of action must be involved in both cases." I.A. Durbin, Inc. v. Jefferson National Bank, 793 F.2d 1541, 1549 (11th Cir. 1986)[applying Florida law].

In this case, all elements are clearly met. The parties thoroughly litigated the foreclosure action and the state court rendered a judgment on the merits that was affirmed on appeal. The state court had both subject matter jurisdiction of the foreclosure action and personal jurisdiction of the parties. Thus, it was a court of competent jurisdiction. The parties in the foreclosure action are identical to the parties in this contested matter. Similarly, the debtor's objection to Washington Mutual's claim involves the same cause of action at issue in the foreclosure action — the debtor's contractual obligations under the note and mortgage.

The foreclosure judgment was entered shortly before the debtor filed his bankruptcy petition. The debtor made no payments to Washington Mutual after the entry of judgment and before the filing of the bankruptcy case. Accordingly, the court concludes that the foreclosure judgment in favor of Washington Mutual establishes the debtor's liability to the bank for prepetition arrearages in the amount of $17,859.60 for principal, interest, and escrow advances, $739.92 in late fees, $62.55 in property inspection fees, $185 for a supplemental title search, $149.50 for foreclosure action filing fee, $156 for service of process costs, $30 for corporate search fees. Washington Mutual has therefore established its entitlement in the amount of $19,182.57 for prejudgment principal, interest, and costs under the doctrine of res judicata.

The foreclosure judgment also establishes prepetition attorney's fees in the amount of $7,500 under the doctrine of res judicata. Washington Mutual can claim these fees in its prepetition arrearage claim to be paid through the plan if they satisfy Section 506(b) of the Bankruptcy Code.

Section 506(b) of the Bankruptcy Code provides:

(b) To the extent that an allowed secured claim is secured by property the value of which, after any recovery under subsection (c) of this section, is greater than the amount of such claim, there shall be allowed to the holder of such claim . . . any reasonable fees, costs, or charges provided for under the agreement under which such claim arose.

The court is required to determine first, therefore, whether Washington Mutual is an oversecured creditor. In Orix Credit Alliance, Inc. v. Delta Resources, Inc. (In re Delta Resources, Inc.), 54 F.3d 722, 724 n. 1 (11th Cir. 1995), the court defined an oversecured creditor as a "secured creditor whose collateral is worth more than the amount of the debt to it." The broker's price opinion prepared on August 18, 1999 (Bank's Exhibit No. 15), just weeks before the debtor's bankruptcy filing, establishes that the debtor's home has a market worth, "as is", in the amount of $200,000 to $230,000. This evidence establishes that the debtor's home, the collateral that secures the debtor's obligation to Washington Mutual, is worth more than the total debt of $131,536.71 claimed by Washington Mutual in its amended Claim No. 4.

The court therefore determines that Washington Mutual is an oversecured creditor within the meaning of Section 506(b) and is therefore entitled to prepetition attorney's fees if provided for in the debtor's promissory note and mortgage. In this case, the controlling mortgage provision for attorney's fees and costs is very broadly worded to encompass "all costs and expenses of collection and reasonable attorney's fees, including costs, expenses and reasonable attorneys' fees on appeal, if collected by foreclosure . . . ." The attorney's fees at issue clearly fall within the ambit of fees allowed under the note and mortgage. Washington Mutual has therefore established its entitlement in the amount of $7,500 for prejudgment attorney's fees under the doctrine of res judicata. Washington Mutual's entitlement to these fees has been fully, completely, and conclusively established in the state court judgment.

In sum, Washington Mutual has established its entitlement in the amount of $26,682.57 for monies owed on the mortgage foreclosure judgment.

2. Post-Judgment Amounts

In its proof of claim, Washington Mutual also includes $397.07 for additional costs incurred after the entry of the judgment. Upon examination of the evidence, $131.95 of this amount was incurred post-petition and will be determined in Section III.B. below (Bank's Exhibit Nos. 14, 18, 29). The remaining $265.12 consists of one late fee in the amount of $44.84, $160 for broker's price opinions, and $60.28 for publication of foreclosure sale.

Anthony Evans, a bankruptcy default specialist at Washington Mutual, testified on behalf of the bank. He testified that the debtor incurred one late fee in the amount of $44.84 post-judgment and pre-bankruptcy (Document No. 92, transcript of hearing held on June 1, 2000, at 19, lines 1-16). Mr. Evans also testified that the bank incurred fees for a broker's price opinion prepared on November 9, 1998 (Bank's Exhibit No. 17) in the amount of $85 (Document No. 92, transcript of hearing held on June 1, 2001, at 21, lines 17-25, and at 22, lines 1-7) and a broker's price opinion prepared on August 18, 1999 (Bank's Exhibit Nos. 15 and 16) in the amount of $75 (Document No. 92, transcript of hearing held on June 1, 2001, at 20, lines 11-25, and at 21, lines 1-9). The court credits this testimony and evidence and determines that Washington Mutual has established the debtor's liability in the amount of $119.84 for these post-judgment costs.

The court sustains the debtor's objection as to $85 for the November 1998 broker's price opinion because this cost was incurred prior to the entry of foreclosure judgment and was not assessed to the debtor in that judgment. The foreclosure judgment is determinative of the liability and amount owed by the debtor through August 5, 1999. Res judicata therefore precludes the bank from assessing this cost to the debtor in this bankruptcy case.

Sarah Johnson, an administrative assistant employed by Gibbons, Cohn, Neuman, Bella, Segall Allen, the attorneys for Washington Mutual, also testified for the bank. She testified that the law firm paid on the bank's behalf $60.28 for a publication of sale notice (Exhibit Nos. 27 and 28) before the filing of the debtor's bankruptcy case (Document No. 93, transcript of hearing held on June 1, 2001, at 115, lines 19-25, and at 116, lines 1-17). The court credits this testimony and evidence and determines that Washington Mutual has established a charge in the amount of $60.28 for post-judgment costs.

In sum, Washington Mutual has established its entitlement to the amount of $180.12 for monies owed on post-judgment prepetition costs.

3. Summary

Accordingly, the court sustains the debtor's objection as to the broker's price opinion cost in the amount of $85. The court concludes that Washington Mutual has established a prepetition arrearage claim for principal, interest, escrow, costs, and attorney's fees of $26,862.69. This is the prepetition arrearage that the debtor must pay through the plan to cure and reinstate the mortgage.

B. DEBTOR'S OBJECTION TO POST-PETITION ATTORNEY'S FEES AND COSTS

In its proof of claim Washington Mutual includes $11,985 in post-petition attorney's fees consisting of $7,230 for services performed in defending against the debtor's appeal of the foreclosure judgment, $915 for services in connection with obtaining relief from stay, $780 for services performed in general bankruptcy matters, and $3,060 for miscellaneous services performed to protect the bank's interest during the pendency of the bankruptcy (Claim No. 4 and Bank's Exhibit No. 1).

Washington Mutual also includes $131.95 in post-petition costs consisting of $50 for a proof of claim preparation fee, $6.95 for one property inspection, and $75 for a filing fee for a motion for relief from stay.

The debtor objects to the inclusion of post-petition attorney's fees and costs in the arrearage claim that he must pay in his Chapter 13 plan. He correctly points out that the court confirmed the plan on the basis of a much lower claim than the one Washington Mutual now asserts. More importantly, the order confirming the plan specifically provides that the trustee will pay the "pre-petition [arrearage] claim of [Washington Mutual] in full, without interest." (Emphasis added). For these reasons, the court determines that the order confirming plan does not provide for the payment of post-petition attorney's fees and costs through the plan.

To be sure, Washington Mutual devoted a significant portion of the hearing to the presentation of testimony and evidence in support of its claim for post-petition attorney's fees and costs. The debtor similarly spent a great deal of time in the examination of Washington Mutual's witnesses on this issue. The parties fully litigated the validity and reasonableness of Washington Mutual's claim for post-petition attorney's fees and costs. Post-petition claims that are not included within the plan, however, are outside the scope of the bankruptcy court's jurisdiction. See Telfair v. First Union Mortgage Corp., 216 F.3d 1333, 1339 (11th Cir. 2000). Thus, the court will not attempt to determine Washington Mutual's entitlement to post-petition fees, their reasonableness, or their amount.

The court will therefore sustain the debtor's objection as to post-petition attorney's fees and costs. Accordingly, the court will disallow without prejudice Washington Mutual's claim for post-petition attorney's fees in the amount of $11,985 and post-petition costs in the amount of $131.95. Nothing in this order is intended to determine Washington Mutual's entitlement to its post-petition attorney's fees and costs or their reasonableness or amount. Subject only to the automatic stay, Washington Mutual may seek to recover its post-petition fees and costs directly from the debtor, outside the protection of the bankruptcy court and pursuant to non-bankruptcy law, to the extent the terms of the debt instruments permit. Id.

C. DEBTOR'S CLAIM PURSUANT TO SECTION 121 OF THE TRUTH IN LENDING ACT, 15 U.S.C. § 1631

The debtor argues that Washington Mutual (as transferee of Great Western Bank) is liable under Section 121 of the Truth in Lending Act, 15 U.S.C. § 1631, and its supporting regulations, 24 C.F.R. § 3500.7, and Regulation Z, 12 C.F.R. § 226.18, for its failure to adequately disclose the terms and conditions of the loan with respect to the bank's ability to require the escrow of advanced tax and insurance payments, the bank's use of a suspense account to hold partial payments, the bank's ability to impose force placed insurance, and the debtor's potential legal costs and rights in case of a dispute.

The debtor is aggrieved by the bank's apparent ability to impose additional requirements and fees that the debtor did not contemplate or fully understand could be imposed at the time he contracted for the mortgage loan. The debtor characterizes the bank's actions as "deceitful" and "deceptive." The debtor supported his position with voluminous evidence and devoted a substantial portion of the hearing to his passionate testimony on this issue.

The court has no doubt of the debtor's sincere and heartfelt belief in the principled rightness of his position. He is a retiree on a fixed income with health problems and has clearly advocated his position, in state court and in the bankruptcy court, at a heavy personal and emotional cost.

The debtor is foreclosed from raising a claim for the bank's disclosure violations in this court, however, because the foreclosure judgment is res judicata on this issue. The debtor unsuccessfully asserted this same claim in the foreclosure action, and the state court decided the issue in Washington Mutual's favor (Document No. 93, transcript of hearing held on June 1, 2001, at 189-190).

Even if the debtor were asserting this claim for the first time, he would nevertheless be barred at this late date. "Res judicata bars not only questions actually decided, but also all grounds for recovery and defenses which might have been presented in the prior litigation between the parties." Walker v. Contimortgage (In re Walker), 232 B.R. 725, 733 (Bankr.N.D.Ill. 1999). The debtor's claim under this section of the Truth in Lending Act is clearly a compulsory counterclaim to the bank's claim for principal, interest, escrow advances, and late fees at issue and decided in the foreclosure action. The debtor's argument is that he should not be liable for the full amount of principal, interest, late fees, and escrow advances sought by Washington Mutual in the foreclosure action and included in this bankruptcy case as an arrearage claim because the arrearages resulted from Washington Mutual's violation of the Truth in Lending Act. This Truth in Lending Act claim was therefore required to be raised — and indeed it was raised and decided — in the foreclosure action.

The debtor complains that the state court's determination of his claim under the Truth in Lending Act was wrong. Nevertheless, "[w]hen a state court has valid jurisdiction, alleged deficiencies in the state court process must be addressed to the trial court; they cannot be collaterally attacked" in the bankruptcy court. In re Al's Transmission Service, Inc., 1995 WL 781697 at *2 (Bankr.D.Md. 1995). In this case, of course, the debtor litigated an appeal of the state court's judgment through the Florida appellate court. The court of appeal affirmed the trial court. This court cannot reverse the decision of the state court that has been affirmed on appeal.

Accordingly, the court concludes that the debtor cannot recover damages on this Truth in Lending Act claim.

D. DEBTOR'S CLAIM PURSUANT TO SECTION 125 OF THE TRUTH IN LENDING ACT, 15 U.S.C. § 1635

The debtor also contends that Washington Mutual is liable for damages pursuant to Section 125(b) of the Truth in Lending Act, 15 U.S.C. § 1635(b), for its failure to provide notice of the debtor's right to rescind the transaction within three business days of "the consummation of the transaction or the delivery of the information and rescission forms required under [Section 125(a) of the Truth in Lending Act, 15 U.S.C. § 1635a)] together with a statement containing the material disclosures required under this subchapter, whichever is later."

It appears that the debtor did not raise this claim in the state court foreclosure action. The cause of action at issue in this Section 125 claim goes to the making of the loan, rather than a dispute as to the obligations under the loan as was the issue in the state court foreclosure action. Because the claims are not the same, res judicata does not bar this Truth in Lending claim. Walker, 232 B.R. at 734 [claim was not barred because the only connection between the Truth in Lending claim and the earlier foreclosure action was the execution of mortgage documents].

It is undisputed that Great Western did not provide a notice of the right of rescission to the debtor at any time before the loan was funded. Washington Mutual, as transferee of Great Western, is liable pursuant to Section 131 of the Truth in Lending Act, 15 U.S.C. § 1641, for the loan originator's disclosure violations made at the commencement of the loan.

Section 125(e)(1) of the Truth in Lending Act, 15 U.S.C. § 1635(e)(1), however, specifically exempts a residential mortgage transaction as defined in Section 103(w) of the Truth in Lending Act, 15 U.S.C. § 1602(w). That section defines a residential mortgage as "a transaction in which a mortgage, deed of trust, purchase money security interest arising under an installment sales contract, or equivalent consensual security interest is created or retained against the consumer's dwelling to finance the acquisition or initial construction of such dwelling."

Accordingly, it is apparent that there is no right of rescission under Section 125 of the Truth in Lending Act, 15 U.S.C. § 1635, when the transaction at issue is a purchase money mortgage.

The debtor testified that he used the money he borrowed from Great Western Bank to finance the purchase of his house (Document No. 93, transcript of hearing held on June 1, 2001, at 179). This testimony is corroborated by the settlement statement (Bank's Exhibit No. 5). The court credits this testimony and evidence. The court therefore determines that the obligation represented by the note and mortgage was a purchase money mortgage on residential mortgage.

The debtor argues that the bank's alleged disclosure violations of Section 121 of the Truth in Lending Act, 15 U.S.C. § 1631, as discussed in Section III.C. above, cause the transaction to lose its status as a purchase money mortgage (and its exemption under the Act) and somehow transform it into a consumer credit transaction that is subject to the notice of rescission requirements of Section 125(a) of the Act, 15 U.S.C. § 1635.

The court determined in Section III.C. above that the debtor was barred from pursuing his Truth in Lending Act Section 121 claim because it had been conclusively determined against him in the state court foreclosure judgment. The debtor's argument must fail on that basis. In any event, the debtor has not cited any credible authority that advances the position he asserts.

The debtor has the burden of proving this claim. Peters v. Jim Lupient Oldsmobile Co., 220 F.3d 915, 917 (8th Cir. 2000). The debtor has failed to carry his burden of persuasion on this issue. The court must therefore disallow his claim for damages under Section 125(b) of the Truth in Lending Act, 15 U.S.C. § 1635.

IV. CONCLUSION

For the reasons stated above, the court has determined that the debtor's objection to Washington Mutual's claim should be sustained as to the allowance of a prejudgment broker's opinion fee.

The court has also determined that the debtor's objection to Washington Mutual's claim should be sustained as to the allowance of post-petition attorney's fees and costs. Because the debtor's plan does not provide for the payment of post-petition attorney's fees and costs, the court does not have jurisdiction to determine the validity and amount of those fees and costs. The parties are free to litigate the validity and amount of post-petition attorney's fees and costs in a non-bankruptcy forum.

In addition, the court has determined that the debtor has not established that Washington Mutual committed any violation under the Truth in Lending Act.

Accordingly, the court orders as follows:

1. The debtor's objection to Claim No. 4 is sustained in part and overruled in part.

2. Washington Mutual's claim for $12,201.95 in broker's price opinion fees and post-petition attorney's fees and costs shall be disallowed without prejudice.

3. Washington Mutual shall have an allowed secured prepetition arrearage claim in the amount of $26,862.69 to be paid through the debtor's confirmed Chapter 13 plan.

4. The debtor's objection to claim, including his claim for damages for Truth in Lending Act violations, is otherwise overruled.