'Playing the Odds'

"These guys are smart and they are playing the odds," said Gardner.  "And the odds are that 95 percent of the people will have no idea exactly what's going on.  That 95 percent will just go ahead and pay it."

Gardner's goal is ambitious. He's training an army of lawyers to go out onto the complex battlefield of credit servicing, and hopes that they in turn will train fellow lawyers in the same thing, spreading the knowledge to thousands.

"There is no way I can train 10,000 lawyers," Gardner acknowledged. "But maybe 200 can train 2,000 and they can train 2,000 more and then 4,000 more and keep going."

Bringing in the 'Forensic Accountants'

Sometimes the legion of lawyers is not enough to sort through mortgage-service fees. Gardner says some fees seem so innocuous that often he has to bring in a forensic accountant to uncover what is legitimate and what is not. According to Gardner, the accountant almost always uncovers "bogus" fees.

"I don't know of a case that he's looked at that he didn't find fees that shouldn't have been charged," Gardner said of the accountant, adding that the fees can range from "about $500 after a case is first filed, up until $28,000 or $29,0000 in cases I have had."

And he's not alone. When Katherine Porter, a professor at the University of Iowa studied 1,700 bankruptcy cases, she found that questionable fees had been added to almost half the loans looked at, and that they were missing important pieces of documentation, making it difficult to know what the homeowner is being charged for.

"The problem is, without that documentation, it is very hard for the homeowner or his bankruptcy attorney or the bankruptcy court to make sure that the debtor is being charged the right amount," said Porter. "The law requires that documentation for a reason, because without that documentation you can't be sure that you are being charged fairly."

Bankruptcy judges have begun to respond. Gardner has a wall covered with copies of checks from judgments he's won against a variety of mortgage-servicing companies.

"We display these checks on the wall to sort of give my boot campers some encouragement," Gardner said. "That even though it's very difficult, there is some financial incentive for them to do it."

And he cautions that it's not just financially distressed homeowners who find themselves the victims of mortgage servicing fraud. He warns all mortgage holders to be cautious.

"If you have a home mortgage you need to do the same thing whether you are in bankruptcy or not," Gardener warned. "Whether you are AAA credit or single D credit. And you need to write your servicer at least once every six months and ask for your transaction history."

He says the fees often are very small -- $25, $100, $200 -- but if they happen to thousands of customers they add up to millions of dollars in revenue for servicing companies. And, critics warn, with less business coming in from new loans, mortgage servicers will be even hungrier for other ways to make money.

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