Bankruptcy judges are uncovering some rather, well, icky practices in the mortgage servicing industry. Excessive fees, lack of notice before starting foreclosure proceedings, and incorrect application of payments are just some of the goings-on at some mortgage giants, according to the International Tribune. In one case a bank charged an elderly woman $465.36 in late fees and charges for missing a single $554.11 mortgage payment! In another, the lender asked a bankruptcy court to allow it to foreclose on a couple in bankruptcy because there was no equity in the home.  When that is the case lenders are allowed to foreclose in order to minimize their costs.  However, in this case the borrowers had $120,000 in equity and they were given no notice of the foreclosure by the bank! The judge in the case found there was an abuse of process and ordered the lender to pay the homeowners’ legal fees. The bottom line is this: if bankruptcy judges are finding lenders to be unethical when dealing with borrowers in bankruptcy, might the loan servicers also be conning the rest of us? Borrowers should make it a priority to look their statements over, check for unexpected fees, and make sure that their impounded taxes and insurance are calculated correctly.